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STATE PAPERS AND 
PUBLIC ADDRESSES 



18527 



D EDO? Db^EM7S b 

California Stale Library 



STATE PAPERS AND 
PUBLIC ADDRESSES 



GOVERNOR CULBERT L OLSON 

JANUARY 2, 1939 
JANUARY 4, 1943 




SELECTED BY STANLEY MOSK 
EXECUTIVE SECRETARY TO THE GOVERNOR 



printed in California state printing office 

SACRAMENTO, f 9^2 GEORGE H. MOORE, STATE PRINTER 





CULBERT L. OLSON 
GOVERNOR OF CALIFORNIA 

January 2, 1939— Januaky 4, 1943 



FOREWORD 



The four years, 1939-43, have teen the most eventful in the life 
of California. 

During the forepart of that period, we were concerned with the 
desperately acute problems of the worst depression and gravest unem- 
ployment crisis in our Nation's history. Our proposals to the Legis- 
lature and to the people were designed to alleviate suffering, to provide 
employment, to streamline government in the interest of economy and 
to provide the necessary revenue to stem a rapidly rising State Treasury 
deficit. 

During the latter part of that period, we were plunged into the 
greatest war in the history of mankind. Our problems were suddenly 
reversed: labor shortages, the preservation of a treasury surplus for 
post-war reconstruction, and the transformation of all industry, farming 
and governmental activity from peace to ivar functions. 

Concluding a brief four-year span thus varied, I felt it most 
appropriate to preserve the legislative recommendations, major public 
addresses and proclamations of the Chief Executive. I therefore 
caused this compilation in one volume to be undertaken, and hope that 
a precedent may be established for fxiture administrations to follow. 

Naturally this volume is far from complete. Every address that 
was in any respect political has been omitted, even though some expres- 
sions may have been significant in a study of the policies and purposes 
of this administration. Many other addresses were omitted because of 
their length, some because the subject was covered in other messages, 
many because they were delivered extemporaneously and no recorda- 
tion was preserved. Similarly, only the most important of legislative 
messages and proclamations were included. 

I have attempted, however, to include all messages and papers 
pertaining to the war effort in California, for I feel that posterity will 
record our present struggle against the vicious forces of fascism as the 
sternest test democracy and freedom have ever faced. Our beloved 
California, with its great shipyards and plane factories, its agricidtural 
production, and its contribution of manpower to our military and naval 
forces, is in the forefront of the fight. 

That I have been its Chief Executive during these critical four 
years shall always be a source of deep gratification to me. 




Governor of California 



Sacramento, California 
December 22, 1942 



TABLE OF CONTENTS 



Page 



Foreword v 

PART I 

Inaugural Address, January 2, 1939 3 

PART II 

Messages to the Legislature, 1939 15 

Messages to the Legislature, 1940 43 

Messages to the Legislature, 1941 93 

Messages to the Legislature, 1942 177 

PART III 

• Public Addresses and Radio Talks, 1939 183 

Public Addresses and Radio Talks, 1940 233 

Public Addresses and Radio Talks, 1941 273 

Public Addresses and Radio Talks, 1942 341 

PART IV 

Proclamations, 1939 395 

Proclamations, 1940 . 417 

Proclamations, 1941 435 

Proclamations, 1942 463 



vii 



PART I 

o 

INAUGURAL ADDRESS 

o 

January 2, 1939 



INAUGURAL ADDRESS 

Delivered to the Senate and Assembly in Joint Session 
Monday, January 2, 1939 



Members of the Legislature and My Fellow Citizens of California 

It is an honor to be chosen the people's representative in any posi- 
tion of public service. It is a trust, the violation of which through vpord 
or deed, accordinpr to my concept, is a form of treason. How deeply I 
sense the honor of being elected by the people of California as their 
Chief Executive can be known only to me. Mere words could not 
express it. "Words would fail me if I tried to utter them on this solemn 
occasion of taking my oath of office. 

I approach my responsibilities with humility. I intend that faith- 
fulness to the trust imposed in me shall ever mark my administration. 
It is my sincere desire that the record of this administration's accom- 
plishments, with due allowance for honest mistakes, will in time con- 
vince the people of the sense of duty that weighs upon my heart and 
conscience. 

I wish to assure every citizen that I enter the high office of Gov- 
ernor of our great State free of all prejudices, even against those who 
most bitterly, and sometimes unfairly, opposed my election. I respect 
honest differences of philosophy and viewpoint on public policies. 
Marked differences in partisan opinion, for the most part, arise out of 
differences in understanding our common problems and the methods 
necessary to meet them through government. These are but the nat- 
ural and healthy attributes of a functioning democracy. 

Every person in California, regardless of party, color, creed or sta- 
tion in life, must know that, not only am T without prejudice, but I 
regard it as my sacred duty, under the oath I have taken today, to pro- 
tect every person's civil liberties, and equality before the law, with 
every power at my command. These are precioiis rights. The founders 
of our republic and the preservers of the Union made supreme sacrifices 
for these rights. They are the very cornerstone of our democracy. 

As we witness destruction of democracy elsewhere in the world, 
accompanied by denial of civil liberties and inhuman persecutions, 
under the rule of despots and dictators, so extreme as to shock the mora] 
sense of mankind, it seems appropriate that we Californians, on this 
occasion, should announce to the world that despotism shall not take 
root in our State ; that the preservation of our American civil liberties 
and democratic institutions shall be the first duty and firm determina- 
tion of our government. 

America has built enormously productive facilities for manufac- 
turing. Our scientists, engineers and technicians have literally recre- 
ated the world in which we live. It is now well known that we have 
both the capacity and the ability to produce abundantly for all. But 
these advances, wonderful as they are, have brought along their own 
new and extremely difficult problems. We are a long, long way from 
the goal of social justice. "We have yet failed to solve the question of 



[3] 



4 



STATE PAPERS AND PUBLIC ADDRESSES 



distribution that attends our newly-developed productive skills and 
capacities. This failure has plungred us into hard times and depres- 
sion — the longest and most persistent in modern times. 

But with all of our seeming failure; with all our difficulties and 
economic maladjustments; despite the puzzling paradox of unemploy- 
ment and poverty in the midst of potential plenty, every right-thinking 
citizen, native or foreign born, regards his American citizenship as his 
most precious pos.session. He knows that it is a part of the sovereign 
power of the people to guide their own destinies. 

Confronted by economic and social crisis, are we going to move for- 
ward toward the destiny of true democracy, or slide backward toward 
the abyss of regimented dictatorship ? 

In the final analysis, this depends upon the intelligence with which 
the people exercise their franchise, upon the wisdom and integrity of 
their leadership; and iipnn the courage with which we face our 
problems. 

Until all the electorate shall have the benefit of a free education to 
aid them in the expression of their citizenship, it may be expected that 
in the future, as in the past, a large proportion may be confused and 
guided away from their piirpose to go forward for their collective wel- 
fare, by deliberately false or selfish propaganda, superficial considera- 
tions, or provincial circumstances. Such impediments may delay, but 
they must not be permitted to defeat the ultimate successful working 
of American democracy. 

The seriousness of today's crisis in our economy brings home to the 
people in every walk of life the realization of their dependence upon 
each other and gives impetus to social progress. New social concepts 
are born through pain and distress brought upon the people by great 
industrial depressions such as we have been suffering. Every individual 
is forced to realize that he is a social being, not an independent self- 
sufficient entity. 

This has given us a national administration with a social view- 
point, with a new deal program of government service to the immediate 
needs of a people left in despair by the total failure of the sterile poli- 
cies of the old order that are wholly dependent for industrial activity 
upon the promotions, exploitations and aggrandizement of large scale 
private enterprise. 

Independent businessmen who find themselves bankrupt after years 
of constructive effort begin to wonder whether the profit, or capitalistic 
system, is doomed to final and complete failure. But they look with dis- 
trust and misgiving upon any radical change to a new order in our 
industrial life. The American people are slow to make drastic chanires. 
They feel their way, and they are feeling their way under President 
Roosevelt's progressive administration and courageous effort to reform 
our economic system, by providing measures for the protection of labor, 
direct aid to the farmer, to industry, to home oAvners, low cost housing, 
social security, work relief and other social welfare programs. "WTiether 
all such progressive activities are wholly or partially successful, either 
as temporary expedients or as permanent programs, they have saved 
and are saving the present economy from utter collapse. They point 
the way forward — toward the achievement of the aspiration of the 
people for an economy that will afford general employment, abundant 



INAUGURAL ADDRESS 



5 



production, equitable distribution, social security and old age retire- 
ment, which our country, with its ample resources, great facilities and 
the genius of its people, is capable of providing. 

Progress toward that goal is the purpose of all true liberals and of 
the liberal movement within the party to which I belong. 

The results of recent elections in certain of our States are inter- 
preted by a few as indicating a set-back to these liberal and progressive 
policies. By more impartial observers, they are attributed to local 
factors unrelated to any issue as between liberalism and reaction. 

However those incidents may be interpreted, it is certain that the 
American people can not go backward, if our democracy is to endure. 
They must go forward with further measures calculated to improve 
their general welfare and eliminate every form of special privilege or 
class control in our economic system. 

The people of California emphatically declared in our recent elec- 
tion that this State shall go forward, not only in support of the new 
deal measures of the National Government under President Roosevelt, 
but also with State measures having the same objectives. 

The people approve the sound, sensible and thoroughly progressive 
platform of principles and policies upon which my associates and I were 
elected. They have given a mandate to you and to me to translate those 
principles into law and sound government procedure as promptly and 
effectively as it is possible to do. 

There should be little room for doubt in our minds as to the kind 
of government the people of California demand. The issues were clear 
and the decision rendered at the polls was so conclusive as to leave each 
of us no false or shadowy concept as to the road we are to follow. 
There is none among us who can doubt that the people have voted for 
a government that shall honestly place human values before material 
values ; that they want a government that will do the human thing in a 
sound and workable way, unswerved by pressure from any self-seeking 
group or special interest. 

With that mandate, I approach my duties as Chief Executive, 
confidently relying upon your fullest cooperation. The people expect 
such cooperation from you and I shall rely upon your willingness to 
cooperate — your willing assistance in performing that mandate. I am 
certain that you, as well as I, deem it a solemn duty to respond to the 
will of the people. Good faith, unselfish, nonpartisan cooperation 
between the legislative and executive branches of our government is 
expected of us. We must not fail in our duty ! 

All of us, of all parties, employers, employees, the professions, the 
unemployed, the youth, the aged, and the helpless — are primarily con- 
cerned in the achievement of a common goal ; a higher and more equi- 
table standard of living, a higher and more cultured standard of think- 
ing; the replacement of prejudice with reason; the eradication of the 
causes for class consciousness and group antagonisms, and a citizenship 
motivated by a sense of social and civic responsibility. 

The people of California want employment, a decent standard of 
living, education, opportunities for youth, social security, old age retire- 
ment, protection against pauperism and starvation. Activities in pri- 
vate industry and individual enterprise must be guided by these social 
objectives, if our present economy is to survive. 



6 



STATE PAPERS AND PUBLIC ADDRESSES 



O^TOers of capital and means of production and distribution must 
realize their responsibility to society — not to radically engage in human 
exploitation, but to conservatively engage in management for human 
advancement. They must be satisfied with stability and permanency of 
investments for strictly conservative and safe returns. Our policies in 
the field of industrial relations will be to aid in establishing this sound 
basis for industrial activitj^ 

With assurance guaranteed by our Constitution that no confisca- 
tory purpose will be found in any of our acts as representatives of the 
people, who are sworn to uphold their Constitution, honest business 
has nothing to fear from this administration. But any and all efforts, 
in the name of business, to defeat the general welfare, to obtain special 
or selfish privileges, will be vigorously opposed. Any effort to extend 
a corrupting tentacle into any department of our State government will 
be pilloried and those responsible for it will be found and punished to 
the full extent of the power given the executive branch. 

This administration will function both on behalf of the economi- 
cally submerged part of our population, whose poverty presents the 
greatest challenge to the success of democracy and the preservation of 
the present economy, and on behalf of California's industries, employ- 
ers and employees, and all citizens dependent for their well-being upon 
the healthy normal growth of the economic life of California. 

Let me assure all business men and business organizations that in 
their transactions with the State they need neither political pull nor 
political lobbyists in order to obtain a fair hearing, and a fair and a 
square deal under the law. Legitimate business concerned only in 
honest intelligent enactment, and honest and efficient administration of 
law, may only injure its own cause before the people and with this 
administration, by employing professional political lobbyists to repre- 
sent it in its dealings with the State. 

We need — we must have — a larger production and use of consumer 
goods in California. Increased business and the steady employment of 
all our employable citizens upon a decent American standard of living 
is necessary to that accomplishment. 

We must reduce the burden of taxes which private industry and 
those employed in it are now required to bear in order to support in 
pauperism those for whom employment can not be found. 

That part of the Federal Government's work relief spending allot- 
ted to our State, generous though it is, finds employment for only about 
one-fifth of the unemployed employable residents of California, and the 
discontinuance of even this inadequate relief work is threatened. 

New avenues of employment must be created by California's indus- 
tries or by the State, or by both. To this end, business, labor and gov- 
ernment must cooperate with a new sense of their individual and col- 
lective responsibilities. We must work hand in hand for the general 
welfare. 

We know, of course, that the problems and responsibilities of Cali- 
fornia industry in recent years have been multiplied in number and 
complexity as State and National incomes have decreased and general 
unemployment has been met only by doles, debt and increased taxes. 

Instead of idly theorizing on causes, we must face conditions and 
meet them with common sense and practical action. Unemployment and 



INAUGURAL ADDRESS 



7 



poverty is assuredly a condition which need not prevail in bountiful 
California. 

I am not speaking of the unemployment of that negligible few who 
are drones in society, unwilling to work. Society owes them no obliga- 
tion. We are concerned with honest, American citizens, looking for a 
place in our economic structure, willing to work ; unwilling to accept or 
unwillingly accepting charity from government or private sources; all 
eager for an opportunity to engage in useful service and to live a life 
which expresses a natural personal pride and a natural aspiration for 
self-support. If we were facing impossible physical conditions; if we 
were not blessed with ample natural resources and productive power, 
our problem would indeed be distressing. Poverty might then be 
unavoidable, even to the most industrious. But our unbounded natural 
resources, our great productive power — human and mechanical — chal- 
lenge our intelligence to find the methods for general employment, for 
ample production and distribution of the things of life, for the needs 
and comforts of every deserving person, for educational advancement, 
and a cultural development to a higher, a more sensible, a more reason- 
able, a more enlightened and worthwhile civilization. 

It is of supreme importance that we take action— action on the part 
of the government in cooperation with private industry to provide gen- 
eral employment, industrial activity and increased production and con- 
sumption by our own population of the various and sufficient com- 
modities which our rich natural resources, plant facilities and man 
power amply afford. 

Your government's part in this action should supplement, stabilize, 
stimulate and increase the growth of private industry, rather than 
injure it. Honest cooperation is all that is needed for peaceful progress 
toward general prosperity. 

A detailed study of the requirements of our various State agencies 
and institutions in preparation of the budget for the next biennium, 
soon to be presented to the Legislature, shows that we have inherited 
from previous administrations a deficit which will amount to a total of 
about forty-five million dollars by June 30, 1939, the end of the current 
biennium. California is and has been in the "EED" during the past 
two administrations. I do not refer to this for the purpose of placing 
blame on those previous administrations for an unbalanced budget, but 
to call attention to the serious financial problem we are facing, as will 
be more fully explained when our essential budget requirements are 
presented to the Legislature. 

Our efforts have been and will be to eliminate all unnecessary costs, 
to abolish overlapping and duplicating agencies of government, and to 
practice every reasonable and practical economy, without crippling or 
eliminating necessary State services. 

With all possible economy, a heavy tax burden, during the next 
biennium, can not be avoided. 

The distressing problem of mounting taxes is, of course, directly 
linked with the problem of unemployment and relief. 

We face the continued necessity of meeting nearly one hundred 
million dollars per biennium, to pay small cash doles to those now on 
State relief, without furnishing any relief to some two hundred and 
seventy-five thousand eligible applicants who, with their families, can 



8 



STATE PAPERS AND PUBLIC ADDRESSES 



not now find a place on our relief rolls. Only a definite policy of tax 
relief through self-help employment can relieve the taxpayers of the 
State from this staggering and increasing burden. 

In order that we may discontinue, as soon as possible the mainte- 
nance of employable people in idleness, I submit to the intelligence of 
the legislators, to the intelligence of the taxpayers, to the intelligence 
of the industrialists and businessmen of the State, to the intelligence of 
the unemployed themselves, that we should substitute for the present 
policy of paying niggardly cash doles for unemployment relief, a new 
policy of placing the unemployed at productive work to support them- 
selves. 

In the field of private industry, the right of organized labor to 
honest collective bargaining must be protected; minimum wages must 
be established and vigorouslj' enforced to maintain a decent American 
standard of living; vocational training must be extended, and the doors 
of employment and of opportunity for advancement, through useful 
and meritorious service, must be opened to the eager, splendid j'outh of 
our State. Youth's social-minded ideals, developed while in training 
for lifetime sei'vice, must not be shattered upon their entrance to adult 
life by a selfish, cold, unwelcome world. 

California's elderly citizens have taken the lead in bringing the 
general public to the realization of the plight of those who, having 
served their best years in American industry, must be left to spend 
their declining days in poverty and misery, unless social security pro- 
grams provide for their retirement in health and comfort. 

Such pi'ograms have been started, with provisions for partial aid 
to the support of those in need who have reached the age of sixty-five 
years. California has more than matched the small amount ($15.00 
per month) provided for such eligibles by the Federal Government to 
make a total of thirty-five dollars per month. This amount, however 
inadequate, is more liberal than that paid by any other state. A total 
of thirty-two and one-half million dollars per annum is now required 
of the State and the counties to meet this pension; yet the amount of 
the pension is too low and the age limit too high. For our State to meet 
the amount required to provide this inadequate pension for those of its 
citizens who find themselves in need of pensions at the age of sixty years 
would require approximately forty-eight and a quarter million dollars 
per annum. 

Old age pensions must be furnished by those who are producing 
and by the machinery of production. 

Public support of the old or the young can only be fui-nished by 
taxation in one form or another. 

When other states fail to provide aid for their aged, equal to ours, 
it may naturally be expected that their citizens approaching the eligible 
age will seek residence here. This places a disproportionate share of 
the tax for this worthy social purpose upon our State. For the purpose 
of uniformity, it is necessary that old age pensions, in their entirety, be 
financed by the Federal Government. We shall continue to urge an 
adequate Federal old age security program. 

Meantime we shall favor State aid for pensions to the aged to the 
limit that State finances will permit. That limit, however, because of 
the tax necessary for present unemployment relief, may for a time at 



i 



INAUGURAL ADDRESS 



9 



least, be very nearly reached. But as our tax burden is linked with 
unemployment, so is it linked with the need for old age pensions. More 
liberal old-age pensions may be anticipated when the unemployed are 
placed at productive work for their own support and the heavy tax 
burden for unemployment relief is thus reduced. 

That great and important part of our State's population — the 
farmers who are compelled to market their products at a price below 
the cost of production, have patiently carried on their struggle, but 
with just discontent over this unnecessary condition. In recent years, 
the California farmer has bravely faced the impact of overwhelming 
economic forces. He has stood by while his export markets have 
rapidly dwindled. He has suffered the shock of innumerable tech- 
nological developments, in both industry and agriculture. He has been 
affected by the same powerful and unrelenting swings in price and 
supply which have wrought havoc in the lives of our city people as well. 

The courageous endeavors of the farmers of California in meeting 
their problems, shall receive every deserving service within the power 
of this administration to render. Assistance on the part of the State 
shall be to develop markets and marketing methods which will bring the 
products of the soil to the consumer with the least possible toll to inter- 
mediary agencies; to protect the farmer's income against demoralizing 
competitive trade practices ; to find an outlet for those surplus products 
of the farm for which a market has not heretofore been found. 

If minimum prices for our farm and dairy products are safe- 
guarded against selfish, unfair trade combines in the retail distributive 
field, and if the spread of profit between producer and consumer is 
placed on an equitable basis, a greater consumer demand is certain to 
result. Low cost distribution — which means the elimination of exces- 
sive and exorbitant profits to the nonproducing elements in our eco- 
nomic system — is a matter which demands a new spirit of cooperation 
and active governmental service. It shall be the business of this State 
administration to see to it that unjustified distributive profits shall not 
be exacted at the expense of either the producer or the consumer. In 
this we shall seek and expect the cooperation of those engaged in legiti- 
mate distributive services, to insure a fair and reasonable return to all 
concerned. 

"We shall work hand in hand with the national administration, in 
aiding our farmers in flood control, in the prevention of waste by ero- 
sion, in afforestation and reforestation ; in rural resettlement ; in pro- 
viding decent, healthy living conditions for agricultural labor; in 
obtaining money and credit at minimum interest rates ; and in securing 
water and power through government owTied and operated utilities, at 
the lowest possible cost. 

I have long been committed to the proposition that where a service 
is or becomes necessary to the daily life or existence of all the people 
and is in effect a monopoly it should be owned and operated by the 
people through their own government. In this field of public utilities 
I see no justification for pyramiding private corporations owning or 
controlling the natural resources of the State and exacting tolls and 
profit, often exhorbitant, out of a business which should be no more 
than a nonprofit service to the general public for its health, comfort, 
and welfare. The people can and should use their democracy and their 

2—18527 



10 



STATE PAPERS AND PUBLIC ADDRESSES 



government for their own well-being. In accordance with this principle 
this administration will, in all possible directions further public owner- 
ship and operation of public utilities. 

There is a marked analogy in the circumstances of the present 
change of administration in the government of California and that 
which occurred over twentj'-five years ago. 

In 1910 the entire State government was under the almost com- 
plete domination and control of the principal ptiblic utility of the State 
and its affiliated interests. The people then drove this control from 
power. Since then, privately owned public utility interests and power- 
ful oil and gas producing and distributing interests, have again moved 
in and have been exercising control of legislation and administration 
to such an extent that the natural resources of water, power, oil and 
gas have been exploited primarily for the enrichment of such interests. 
These resources have not been protected and their exploitation has not 
been regulated in the interest of the people. 

With the aid of a subsidized daily press, and cleverly designed and 
costly publicity methods, they have from time to time influenced the 
people to vote against their own interests, through false and misleading 
propaganda. 

As recent as the last November election will be found an illustra- 
tion of this misguidance of the people by such false propaganda, result- 
ing in their voting against ratification of the Garrison Revenue Bond 
bill passed by the Legislature in 1937, which would have enabled com- 
munities to finance the acquisition or building of their power plants or 
other public utilities by the issuance and sale of revenue bonds. A 
thoroughly organized campaign, financed from moneys received from 
the people for public utility services, was carried on, which falsely told 
the voters that under this measure their homes and farms would be 
subjected to the lien of such revenue bonds. No agency of the common 
people was organized or had the necessary finances to meet this false 
propaganda. The past State administration failed to speak out in favor 
of the people's interests and against the perniciously false propaganda 
of the private utility corporations. It remained to some of us in the 
Legislature who supported this measure, and to a few other under- 
standing citizens, to reach as many voters as we could with the truth. 

Similar false propaganda defeated Senate Bill 579, for the protec- 
tion of the people's interests in tideland oil and gas deposits at Hunt- 
ington Beach. With the misleading slogan of "Save the Beaches," 
applied to a segment of the beach already ruined by oil wells, voters 
were misguided on that issue. 

It shall be the policy of this administration to conserve and pro- 
tect our great natural resources and control their exploitation in the 
common interest. The use of these resources and their products is 
essential to the lives of all of the people of the State, and must be 
obtained at the lowest possible cost to the people. 

The construction of the great Shasta dam of the Central Valleys 
Project was instituted as a Federal Government project. The Federal 
Government looks to this State and to its siibdivisions to be prepared to 
receive the benefits of this project, not only in the equitable distribution 
of its water, but in the utilization of its hj'dro-electric power, through 
public agencies. Unless public agencies are prepared with distributive 



INAUGURAL ADDRESS 



11 



facilities to receive such power upon the completion of this great 
project, a monopolistic power trust would be the only entity ready to 
contract with the Federal Government for the distribution of this 
power, with the result that the people of this and future generations 
would be forced to pay unnecessary and exorbitant tolls. 

It shall be the purpose of this administration to promote the means 
for public ownership and operation of plants and distributive facilities 
for the distribution of this electric power to the people at cost. 

During the next twelve months, millions of men, women and chil- 
dren will come as welcome visitors to our great Golden Gate Interna- 
tional Exposition which opens on Treasure Island in San Francisco Bay 
next month. 

Symbolic as it is of the modern achievements of a progressive 
people, this Golden Gate International Exposition means for us some- 
thing greater than a material display of the pride of human accom- 
plishment. It is a fitting monument to the integrity and character of 
the people of this commonwealth. And it must signalize for all of us 
the permanent virtues of a united faith in the future destiny of Cali- 
fornia. 

Fervently do we hope that the spirit of true friendship so magnifi- 
cently exemplified by this exposition of modern progress will engender 
in each of us, as public servants, a noble appreciation of the ever- 
lasting value of unselfish devotion to the cause of honest, liberal, con- 
structive, humane government. 

For the successful accomplishment of the task confronting us, we 
shall call forth the best in each of us in a spirit of genuine devotion 
and supreme fidelity to the oath of office we take as we enter the service 
of our State. 

Our hopes for progress are high ; our desire for unity of action and 
accomplishment through a conscientious application of our respective 
talents and energies, as a grave concern of all alike. Surely, in each 
there is a full measure of loyalty and patriotism which will find expres- 
sion during the months to come in advancing the welfare of the people 
of California. 

Preelection battles are behind us. Let them remain behind us. Let 
us now approach our duties and our problems without bias or selfish 
purpose. 

Memorable indeed should be this new year upon which we are 
embarking with courageous purpose to meet and solve our common 
problems. 

With solemn recognition of my sacred duty to the people of Cali- 
fornia, I enter upon the Governorship, deeply conscious of the great 
work which lies before us in the interests of social and economic prog- 
ress through liberal government. 



PART II 

O 

MESSAGES TO THE LEGISLATURE 

o 

FIFTY-THIRD LEGISLATURE 
REGULAR SESSION 

Convened January 2, 1939 



HEALTH INSURANCE 



State of Californl4, Governor's Office 

Sacramento, April 13, 1939 

To the Senate and Assembly of the State Legislature of California 

Greetings : I wish at this time particularly to call your attention 
to the health insurance measures. Senate Bill No. 1128 and Assembly 
Bill No. 2172, and very strongly to urge their passage. 

It is no longer seriously debated that a fundamental change is 
needed in the method of meeting the costs of medical care and the risks 
and loss of sickness, especially for wage earners and others of small 
or moderate income. 

The unemployed and those on relief must of necessity be cared for 
at public expense. The more prosperous can be cared for under the 
existing system. But between these sroups lies the much larger group 
of employed persons earning up to $3,000 a year, who are able to sup- 
port themselves while employed and in health. For them unpredictable 
serious illness means disaster and destitution. 

We have already provided insurance compensating these employees 
for losses due to the cessation or loss of their jobs, or due to accident or 
illness incident to their occupations. But there is as yet no provision 
for medical care for them, or of compensation for losses due to non- 
occupational sickness or injury. The purpose of these bills is to provide 
for this contingency, which is in manv cases the most serious crisis in 
the life of a worker and his family. Many studies have shown that this 
is the largest contributing cause of destitution among normally self- 
supporting people. 

There is also virtually unanimous consent, at least in California, 
that the way to meet this risk is to spread its cost over the group, by 
insurance. The averasre financial burden of sickness is well within 
the ability of employed waee earners, industry and society to meet. 
The burden is beinor carried now after a fashion, but the results are 
characterized by disa.ster to the individual worker; because sickness 
strikes him with unaverage force. One worker mav have a costly ill- 
ness near the beginning of his earning life. Another may go many 
years in perfect health. The best way to meet this unaverage risk is 
by insurance; just as we now meet loss by fire, death, unemployment 
and occupational accident and disease. 

There still remains uninsured, one great risk having inescapable 
social aspects, implications and obligations; the risk of nonoccupational 
illness. This risk is already insured in nearly every other highly 
industrialized country in the world. It is now time that it be done in 
our country. It is readily susceptible of being done on a state-by-state 
basis. It's time that we have a broad compulsory health insurance 
program in California. 

The need and the demand for health insurance is demonstrated 
by the many plans of commercial, cooperative, industrial and other 

[15] 



16 



STATE PAPERS AND PUBLIC ADDRESSES 



private or voluntary systems now in operation or recently proposed. 
Many of these have served, and may continue to serve, a useful purpose 
within their limits. But, by their very nature, they have not met and 
can not meet broad social requirements. They can not cover the whole 
group. They inevitably omit a large number of those who need pro- 
tection most. 

The only way to make such a system comprehensive enough to be 
socially adequate is the way it has already been done in this country with 
workmen's compensation and unemployment and old a<je insurances, 
and as has been done with health insurance in twenty-four of the 
twenty-seven countries now having such systems. That is to make it 
universal, by making it compulsory. 

These observations are made in the liaht of a literally world-wide 
experience with health insurance, and of American experience with 
related forms of social security. The applicability of health insur- 
ance to American conditions has long been under discussion in this 
country. Exhaustive studies have been made which are available to 
all inrpiirers. A movement in this direction is therefore no leap in 
the dark or unconsidered experiment. 

The time has now come to translate that experience and study into 
action. I hope California will take the position of leadership in such 
action ; a position it long asro held in workmen's compensation. Health 
insurance will spread rapidly from State to State, as workmen's com- 
pensation did. It will become as universally accepted. California 
should lead, not follow, in this inevitable progress. 

The bills to be presented for your action are based on mature con- 
sideration of all this experience and study. They will stand the test 
of the sharpest scrutiny. If they should be found, in any detail, to 
need further amendment in the general interest, that is a part of the 
normal process of legislation. I hope they will not be amended under 
the pressure of any special interests which can not be identified with 
those of the whole people. 

They will provide the worker, at a cost of one per cent of wages 
each, from the worker, the employer and the State, the most compre- 
hensive medical service yet covered by any health insurance system, 
together with unemployment compensation while disabled by illness, at 
the same rates provided by law for unemployment due to other causes. 

I do not, in this message, go into the further details of these pro- 
visions nor do I refer to specific criticisms. But I do append a more 
detailed statement for your consideration. 

My purpose in thus addressing you is to urge on you, very ear- 
nestly, your open-minded consideration of this vitally constructive 
proposal and your favorable action on it at this session. You will thus 
be meeting what I am confident is the wide-spread wish, as well as the 
great need, of the people of California. 

Respectfully submitted. 

CUI.BERT L. OLSON 
Governor of California 



MESSAGES TO THE LEGISLATURE— 1 939 



17 



Appendix to Governor's Messap^e to the Legislature Re: Health Insur- 
ance Bills— Assembly Bill No. 2172 and Senate Bill No. 1128. 

The proposed health insurance prosram embodied in the com- 
panion bills, Assembly Bill No. 2172 and Senate Bill No. 1128, offers 
California a proved solution of the urgent problems which illness brings 
to wage earners and their families. These problems rest in the two-fold 
calamity which sickness involves — lost earnings and added expenses. 
Through a logical extension of our social security machinery the health 
insurance plan attacks the "lost earnings" aspect of illness by doubling 
the worker's unemployment protection. It provides a new unemploy- 
ment benefit payable during incapacitating illness. 

The health insurance plan meets the "added expenses" part of 
the sickness problem in two ways: (1) by providing actual medical 
and other remedial care and (2) by granting cash allowances toward 
medical and hospital bills incurred. The latter is offered to those 
whose annual earnings exceed $3,000, and who, under the plan, are left 
to make their own arrangements in regard to the medical and other 
care they may need. 

In case of those who earn not more than $3,000 a year, actual 
medical and allied services are guaranteed. These include general 
medical care (including laboratory and X-ray analysis), major surgery, 
obstetrical services and all emergency specialist services, hospital care 
(including ambulance service) and drugs, both for the insured worker 
and for his wife and his dependent children. 

Special maternity cash benefits are made available to insured 
women, to induce at least eight weeks' rest from employment at time 
of childbirth. 

In respect to medical benefits there are no exempted groups except 
employees who mu.st be omitted because they are subject to the exclu- 
sive control of the Federal Government. 

In addition to the compulsory insurance provided for employees, 
the plan offers insurance for medical benefits on a voluntary basis for 
self-employed farmers, professional men, proprietors of small busi- 
nesses and other persons whose annual income does not exceed $3,000. 
This is a very important part of the program. The need of such people 
for health insurance is pressing. They can hope to obtain it on a low 
cost basis only when the voluntary insurance is tied to and safeguarded 
by a broad compulsory system which will ensure real averaging of 
sickness risks. A purely voluntary system open to individuals, inevi- 
tably is faced by adverse selection of risks and consequently high 
premium cost. 

The doctor-patient relationships of private practice are preserved 
in the insurance plan. They are improved by the fact that the unde- 
sirable economic barrier raised by the doctor bill is removed. General 
health insurance practice is opened to every person holding a physi- 
cian's and surgeon's license. The insured is allowed to choose (and 
change) his doctor. The doctor retains his private practice privilege of 
rejecting any person he does not wish for a patient. 

Each beneficiary will be asked to select the doctor he wishes to 
have responsible for his general medical care. Those who do not trouble 
to make such selection will be assigned (subject, of course, to the veto 
of either doctor or patient) to the medical lists of such doctors as 



18 



STATE PAPERS AND PUBLIC ADDRESSES 



wish to add to their practice. The plan requires this assignment to be 
made in accordance with general regulations, guaranteeing an equit- 
able distribution of this practice among those desiring it. 

The doctor, on accepting an insured person for his medical list, 
accepts responsibility for the general supervision of his health and for 
giving general .services as they are needed in accordance with the 
standards of good medical practice. 

Payment of the doctor will be made on the basis of the number of 
patients for whom he is responsible and not on the basis of the actual 
units of service he may render to any particular person. Certain very 
sturdy persons on his medical list may require no actual medical 
attention year in and year out. Others may need frequent visitation. 
The doctor will be paid a quarterly sum for each person whether 
service is rendered or not. Against the ones who make minimum 
demands on his time will be weighed those who are a continuous 
problem. As experience elsewhere has .shown, with any fair amount 
of practice, the work will tend to average out according to the number 
on the medical list, and, of course, the more successfully the doctor 
can avert serious illness the lighter his burdens will be. This system of 
payment makes it greatly to the interest of the doctor to keep his 
patients well. In this respect it is in marked contrast to the fee or 
"unit" system of paying the doctor only when the patient is ill. The 
latter s.ystem places the doctor's financial advantages with sickness 
rather than with health. 

In contrast again to the unit system, which facilitates imposition 
on the fund by the less conscientious practitioner who runs up his 
claims by unnecessary visits and calls, the system adopted makes such 
imposition impos.sible and promotes a fair distribution of the moneys 
available for medical remuneration. This, of course, makes feasible 
a minimum of supervision of the practitioner while under the unit 
system supervision must be rigid and very extensive. 

In addition the adopted system frees the doctor from bookkeeping 
and accounting duties. Any tendency to neglect the patient is checked 
by the latter 's right to change his doctor. 

The plan offers the doctor practicing general medicine for insured 
patients, the opportunity of improving the standard of his medical 
work. It permits him, through diagnostic centers, to have laboratory 
analj'ses and X-ray analyses made when neccssarj^ to proper diagnosis. 
New he mu.st trim his use of these techniques to his patient's purse. 
It permits him consultation and specialists' assistance when needed in 
acute illness cases and it does not penalize him financially for seeking 
needed specialist care for his patient. In private practice, in contrast, 
the general practitioner suffers financial loss when he turns his patient 
over to the specialist. 

Private as well as public diagnostic centers will be used under the 
insurance plan, and the equipment of individual specialists will be 
eligible for approval in insurance work as "correlated units of private 
centers, integrated with the services of approved private hospitals." 

A few very costly and necessary drugs and medicaments (serums, 
vaccines, toxins and antitoxins), such as insulin and pneumonia serum, 
will be dispensed directly by the diagnostic centers. 



MESSAGES TO THE LEGISLATURE— 1 939 



19 



In general, the patient will be permitted to have prescriptions 
griven by his insurance doctor filled at any pharmacy which wishes to 
participate in the insurance work. Set prices will be paid from the 
insurance funds for drujrs prescribed. 

Hospital work and laboratory work will be paid for by the insur- 
ance authorities at rates comparable to the costs of efficiently operated 
public laboratories and hospitals in the area. 

Authority is granted the administrative afrencies to vary the usual 
medical arran<rements when necessary to produce the guaranteed 
services. This is particularly necessary in the face of the conditions 
found in certain rural and mountainous areas of California. In fact, 
the complete creation of health facilities will be required in certain 
parts of our State. 

The new wasre loss seciirity contemplated by the health insiiranee. 
plan will be financed from the existing unemployment contributions. 
All new contributions will be used for medical, hospital and allied 
services. 

Contributions will be divided three ways and because of appar- 
ently insuperable administrative obstacles to the sliding scale contri- 
butions originally contemplated, they will be on straight percentage 
basis. The employer's contribution will add exactly 1 per cent to the 
wages he pays to his workers. The insured worker will contribute 
1 per cent of his wages. The State (with the assistance of a Federal 
grant-in-aid if and when announced Federal plans materialize) will 
duplicate the employer's share. 

The plan calls for integrating the administration of health insur- 
ance with existing unemployment compensation agencies. There will 
be no duplication of existing governmental machinery. No new col- 
lecting, disbursing or wage-record keeping agencies are necessary and 
none are contemplated. The general reporting burden of the employer 
will not be increased. The records which he now must keep and the 
reports he now must make for unemployment insurance will serve for 
health insurance as well. 

The health insurance code accepts the constituted governing 
authority of the Department of Employment. It adds an advisory 
council, the advice and consent of which must be obtained in the 
making of rules and regulations affecting general policy under the 
health insurance code. This council will comprise representatives of 
each of the three largest labor organizations of this State (chosen by 
the Governor from panels presented by each of the labor organizations), 
representatives of employers' organizations (chosen by the Governor 
from panels similarly prepared by employers' organizations) and three 
representative doctors. These doctors will be (1) the State Director 
of Public Health, (2) a representative of the medical schools (chosen 
from the panels presented by the schools, graduates of which are 
eligible for the physician's and surgeon's license) and (3) a repre- 
sentative of the doctors registered for practice under the health insur- 
ance code (chosen from a panel presented by such doctors). 

A bureau headed by a medical executive director (selected under 
civil service regulations) will administer the medical and allied services. 
This bureau will be placed in the Department of Employment as a 
companion bureau to the unemployment compensation agency. The 



20 



STATE PAPERS AND PUBLIC ADDRESSES 



staff of the medical benefits bureau (civil service, of course) will 
include district medical supervisors who will function, among other 
things, as medical referees. British experience over many years has 
proved that the cost of such referee service is socially justified. It 
secures the conscientious physician against competition from "eas.y 
certifiers" in his own profession and also protects him against annoy- 
ance from the occasional lazy patient who insists upon a certificate of 
incapacity which his physical condition does not justify. While such 
patients fortunately are few in number, they have a nuisance value 
out of all proportion to their number. 

The proposed health insurance bill states that its provisions for 
disability cash benefits and its provisions for medical benefits are 
"correlative units of an integrated system of health insurance" which 
must stand or fall together. This is a very important principle — not 
merely because both types of benefit are required for adequate health 
insurance but also because disability unemployment benefits can not 
be administered without the aid of a cooperating service benefits bureau. 

The proposed compulsory program does not pretend to include 
all that an ideal and completely developed health insurance system 
eventually should contain. It is offered as a sound initial program 
which, in contrast to the beginning programs made elsewhere, furnishes 
the essential foundation and structure of an adequate health insurance 
plan. 



MESSAGES TO THE LEGISLATURE— 1 939 



21 



UNEMPLOYMENT INSURANCE 



State of California., Governor's Office 

Sacramento, April 14, 1939 

To the Honorable Members of the Assembly 
Sacramento, Calif ornm 

Greetings: Unemployment insurance is the first line of defense 
against the hazard of unemployment. Since unemployment insurance 
is designed to alleviate the consequences of unemployment and to reduce 
the relief burden of the State, its proper functioning is of vital import- 
ance to the public welfare. One million six hundred thousand Cali- 
fornia workers are now protected under this system of insurance and 
since January 1, 1938, over 300,000 individuals have received benefit 
cheeks. 

It has become apparent that the benefits could be extended to a 
larger group of workers and that the sums given as benefits could be 
liberalized without increasing the rates of contribution. 

Experience has also shown that certain administrative defects 
should be corrected by legislative action at this time to insure the expe- 
ditious handling of claims and the prompt payment of benefits to work- 
ers entitled to them as a matter of right. 

I recommend to j'ou the enactment into law of several important 
corrective features: 

Coverage 

The act should be amended to extend its protection to employers 
who employ one or more workers. The present limitation of coverage 
to employers of four or more workers is inequitable. The man who 
works for a small employer is no less in need of protection than the 
employees of larger establishments. Furthermore, it should be empha- 
sized that there are no serious administrative difficulties in bringing 
small employers into the system. 

The act should be further amended to include certain occupational 
groups not now protected. The present act excludes employees of cer- 
tain nonprofit organizations and it therefore denies the protection of 
this law to many thousands of workers. These workers need this pro- 
tection as urgently as those working for commercial and industrial 
enterprises and the law should be amended immediately to include them 
within the system. 

Agricultural workers and domestic servants constitute two large 
groups of workers not now within the protection of the insurance sys- 
tem. They should be included at the earliest possible date, but before 
this can be effected it will be necessary to devise practicable administra- 
tive procedures. 

It is my recommendation that the Legislature direct the agenc3^ 
administering unemployment insurance to make a thorough study of the 
problem and report to the Governor prior to the next session of the 



22 



STATE PAPERS AND PUBLIC ADDRESSES 



Legislature on administrative procedures that would make such an 
extension feasible. 

Benefits \ 

Since the purpose of unemployment compensation is to secure to 
workers an adequate, though minimum, support during periods of 
unemployment, I strongly recommend an amendment to the act which 
will provide generous benefits for longer periods of time. The financial 
status of the unemployment insurance fund is such that this can be 
done without increasing the rate of contribution and without endanger- 
ing the solvency of the fund. Studies based on actual claims experience 
are now available to guide the Legislature as to tlie extent to which 
liberalization can safely go. 

Administration 

The administration of unemployment insurance in the State of 
California constitutes a vast enterprise involving the protection of the 
rights and the welfare of over a million and a half workers and the 
direction of an administrative staif now in excess of 2,500 State employ- 
ees. The proper dispatch of all the varied functions of this organization 
requires the most efficient type of administrative organization. 

"We have in California a departmental system, the heads of which 
form a Governor's Council similar to the President's cabinet. The 
agencj" responsible for the administration of unemployment insurance 
should be represented in this council. 

This can be accomplished by changing the administrative organi- 
zation from that of a commission to a director appointed by the Gover- 
nor. It should furthermore be pointed out that students of public 
administration are tending to believe that State agencies such as unem- 
ployment insurance, whose functions are largely administrctive in 
character, should be administered by a single director with full author- 
ity and, therefore, with full responsibility for the efficient administra- 
tion of the agency, rather than by a part-time commission. Experience 
in the administration of the California Unemployment Reserves Act 
verifies this conclusion. 

I, therefore, recommeiid that a bill be passed creating a Department 
of Employment to be administered by a director named by and respon- 
sible to the people of the State of California through its Governor. I 
also recommend that such legislation provide that the present admin- 
istrative commission organization be replaced by a representative advis- 
or}- council appointed by the Governor to advise with the director of the 
department with respect to policy matters. 

A suggested bill, embodying these recommendations is annexed 
hereto for your study and consideration. The contents of this bill 
could be amended into any bill in the AB 2267 to 2306 series dealing 
with unemployment reserves, which may not otherwise be needed. 

Provisions to Insure Fair Hearings to Employers and Employees 

It is inevitable that disputes will arise over claim determinations. 
To handle these cases the present act provides for the appointment of 
referees to hear disputed claims. These referees are appointed by 
the commission. The present act further provides that if the parties 



MESSAGES TO THE LEGISLATURE— 1 939 



23 



to a dispute are still dissatisfied with the decision of the referee the case 
can be further appealed to the commission itself. In practice, this 
arrangement has proved highly unsatisfactory. For the commission 
or its staff members to participate in or even to be so closely associated 
with the process of adjudication is to put them into the position of being 
judges in their own cases, which is fair neither to themselves nor to the 
other side. The successful functioning of unemployment insurance 
requires certainty in the minds of the public that the rights of both 
employers and employees will be adequately protected and their com- 
plaints impartially determined. This can be accomplished by divorcing 
all those engaged in the adjudication of disputes from the control of 
others in the department and by giving them independence so that they 
may be free to act on the evidence and the law as they see it. I recom- 
mend legislation which will set up an independent board of review to 
hear all appeals. 

The recommended bill annexed hereto and above mentioned also 
embodies these changes. 

Cooperation with Federal Agencies 

I recommend measures aiming at greatest cooperation with Federal 
agencies. In particular I recommend legislation which will permit the 
transfer of railroad emploj''er and employee accounts to the Railroad 
Retirement Board as required by the Federal Railroad Unemployment 
Compensation Act and by the Social Security Board. Legislation to 
insure that the California act will conform to the requirements of the 
Social Security Act is an absolute necessity. 

I also recommend that a measure be passed which will give to the 
State Department of Employment the authority to make all agreements 
with Federal agencies. The law as it now stands gives authority to 
make agreements with the United States Employment Service to a 
division within the department, the Division of State Employment 
Agencies. This creates a confusion of authority which should be cor- 
rected. 

As these features are an integral part of the administrative organi- 
zation of the department, including, in particular, its powers and duties, 
these suggestions are also embodied in the bill hereto annexed for your 
study and guidance. 

Collection and Enforcement Provisions 

I recommend amendments to the act which will provide more ade- 
quate enforcement provisions and which will strengthen the penalties 
if contributions are not paid. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 



24 



STATE PAPERS AND PUBLIC ADDRESSES 



USURY 



State of California, Governor's Office 

Sacramento, April 18, 1939 

To the Honorable Members of the Senate and Assembly 

Your attention is directed to the great need of the people of this 
State for the abolishment of usury. The common people need protec- 
tion. The legitimate lender needs protection. The entire public will 
benefit from proper regulation. Just supervision will foster and pro- 
mote the general welfare. 

The present constitutional amendment adopted in 1934 (Article 
XX, section 22 of the Constitution), while purporting to prescribe a 
maximum annual rate of interest of 10 per cent, in fact exempts from 
its provisions practically everyone engaged in the money lending busi- 
ness. 

The whole subject of usury should be covered by adequate, effective 
regulation. Fair, just, and equitable rates of interest and service 
charges should be prescribed for all lenders including certain special 
classes, such as pawnbrokers, personal property brokers, and small loan 
brokers. 

Simple legislation might not under the existing law effectively 
remedy the situation. There is too great a risk of having remedial 
statutes declared violative of the present constitutional provision on 
usury. 

I recommend to you a repeal of Article XX, section 22 of the Con- 
stitution, under which in many cases there is no limit to charges for 
the use of money. 

I also recommend a general bill fixing reasonable rates of interest 
and service charges for all money lenders, with separate provisions for 
truly special classes of lenders, to take effect upon its adoption and 
ratification by the people contemporaneously with the repeal of the 
present constitutional provision. 

I recommend you submit to the people an amendment to the Con- 
stitution repealing the present section on usury and providing for their 
ratification of such a general bill on usury. A suggested constitutional 
amendment embodying my recommendation is annexed hereto. This 
measure can be introduced as a new constitutional amendment or its 
substance can be amended into Assembly Constitutional Amendment 
No. 68 or other pending constitutional amendment which may not be 
otherwise needed. 

A suggested general bill regulating the interest rates and service 
charges of all lenders, including the special classes, to be validated and 
ratified by the people as set forth in said constitutional amendment 
embracing my recommendation to you is also annexed hereto. 

This bill can be amended into Assembly Bill No. 408, or any other 
pending bill on the subject of usury you may select for such purpose. 

Your attention is specifically directed to the rates of interest and 
the service charges set forth in my suggested bill which accompanies 



MESSAGES TO THE LEGISLATURE— 1 939 



25 



this message. You have before you several pendiug measures prescrib- 
ing higher maximum interest rates and service charges for certain 
lenders. I will not approve any bill which permits of interest rates or 
service charges for any lenders greater than, or otherwise conflicting 
with, the maximum interest rates and service charges as prescribed, 
limited, and restricted in the general usury bill submitted and recom- 
mended to you herewith. 

In addition to the foregoing recommendations on the subject of 
usurj-, I further recommend you consider and enact other necessary, 
equitable and reasonable regulations, including licensing, bonding, and 
similar governmental supervision under the jurisdiction of the Com- 
missioner of Corporations, of the business of the personal property 
broker and small loan broker. You have before you several measures 
containing, or into which could be amended, such further regulations. 
However, any such bill which j^ou may pass must, if it also prescribes 
the interest rate and service charge of such lenders, be entirely con- 
sistent with the provisions of the general usury bill accompanying this 
message before it will receive my approval and signature. 

Lastly, I recommend to you the adoption of a bill regulating those 
engaged in the sale of personal property under conditional sales or other 
forms of so-called easy-payinent contracts. Such vendors of personal 
property and particularly of new or second hand automobiles should be 
subject to licensing, bonding and other regulations under the Commis- 
sioner of Corporations or at least under some governmental agency 
just as are certain money lenders at the present time. Interest rates 
and service charges under such contracts shoiild also be limited and 
prescribed, in much the same fashion as such rates and charges are 
restricted under the general usury bill submitted to you herewith. 

A bill embodying such regulations and restrictions covering these 
easy-payment contracts should be drafted by the Legislative Counsel 
and introduced as a new measure or amended into any pending bill on 
the subject, if one can be found which is not otherwise needed. There is 
great need for proper governmental supervision of this class of busi- 
ness and I sincerely hope that you will undertake the passage of such 
a law before adjournment. 

From time to time, I will submit to you messages making specific 
recommendations on other subjects of legislation pending before you. I 
trust that you will likewise feel free at any time to confer with me 
concerning any proposed legislation. Only by mutual cooperation may 
we hope to accomplish the greatest public good. 

Yours respectfully, 

CULBERT L. OLSON 

Governor of California 



3—18527 



26 



STATE PAPERS AND PUBLIC ADDRESSES 



TRICHINOSIS 



State of California, Governor's Office 

Sacramento, April 22, 1939 

To the Honorahle Memicrs of the Assenibly 
Sacramento, California 

I wish to present for your consideration a matter of the utmost 

importance to the jjublic health ; the prevalence of trichinosis and the 
necessity for lej^islation to prevent its further spread. 

Trichinosis, one of the most treacherous of major diseases, is caused 
by eating pork in which dwell larvae of the hair-like worm, Trichinella 
Spiralis. It results in severe intestinal pains and hip:h temperature, 
but is rarely diagnosed because of its similarity in reaction to typhoid 
and rheumatic fever. 

According to the United States Public Health Service, there was 
abundant evidence more than a half century ago that the United States 
suffered from an extraordinary prevalence of trichinosis, but that evi- 
dence was misiuiderstood and disregarded, with a resultant appalling 
cost in health and life. 

Studies reported by the United States Public Health Service cov- 
ering the examination of three thousand human diaphragms taken at 
autopsy reveal that 16.3 per cent of the people had trichinosis at some 
time during their lives. These studies have also revealed that of total 
chronic cases reported, the highest incidence areas, with 501 to over 
1000 cases reported per state, included two eastern sates, New York 
and Massachusetts, and California. Two cities show the highest peaks 
of incidence in the entire country, Boston and San Francisco. 

It is generally recognized by the preventive medical profession that 
human trichinosis rests primarily on a basis of swine trichinosis, and 
swine trichinosis has been found to result from the feeding of uncooked 
or inadequately cooked pork scraps and offal to swine. 

Being faced with this health problem, we apparently have a num- 
ber of alternatives open to us. 

(1) We may continue, as we have done over the past lialf century, 
stating that trichinosis is a rare disease in the United States, trusting 
to casual control measures, and generally leaving the consumer to the 
risks of a " buyer beware ' ' policy ; 

(2) We may sound a terrifying and general alarm, a policy which 
may arouse suspicion of all pork and pork products, but which may 
accomplish little other than to luinecessarily injure the pork producer; 

(3) We may inaugurate a requirement of microscopic and trichi- 
noscopic inspection of pork ; this will require millions of dollars annu- 
ally, or 

(4) We may enact reasonable preventive legislation, inflicting 
little burden upon packers and yet providing a large measure of pro- 
tection to the consuming public. 

It is apparent to me that this last named alternative should be 
adopted by the Legislature. Assembly Bill No. 1704, if amended, 



MESSAGES TO THE LEGISLATURE— 1 939 



27 



would provide the necessary framework for attempting effective control 
of trichinosis in California. 

I believe that all slaughter house offal, before it is fed to swine, 
should be cooked in a manner to be prescribed by the State Department 
of Public Health, for killing the trichinae. 

Many health authorities advocate a requirement of sterilization of 
all garbage before it is fed to swine. That would indeed be desirable. 

I believe, as does Dr. William Dickie, Director of Public Health, 
that all pork sold or offered for sale in California, should meet the 
requirements of the Federal Bureau of Animal Industry in reference 
to the prescribed treatment of pork and pork products. To meet that 
standard, I recommend to you an amendment to Assembly Bill No. 1704 
providing a requirement for refrigeration for twenty daj's at a tem- 
perature not exceeding five degrees Fahrenheit. 

I further recommend that a modest appropriation be enacted by 
the Legislature to the Department of Health for the purpose of pro- 
viding necessary siipervision and inspection, pursuant to the terms of 
the enacted regulatory measure. 

I, therefore, urge the Legislature to enact Assembly Bill No. 1704, 
amended according to my suggestions. 

Respectfully submitted. 



CULBERT L. OLSON 

Governor of California 



28 



STATE PAPERS AND PUBLIC ADDRESSES 



OPEN GRAND JURY SESSIONS 



State of California, Governor's Office 

Sacramento, April 27, 1939 

To the Honorable Members of the Assembly, State of California 
Sacramento, California 

Greetings : I am returnin<!: hercAvith, witliout my sig:nature, Assem- 
bly Bill No. 459, entitled: "An act repealing section 925a of the Penal 
Code, relating to sessions of the grand jury. 

My objections to this bill are as follows : 

This bill, if enacted, would repeal section 925a of the Penal Code. 
This section of the Penal Code provides that upon written request of 
the Attorney General (or a district attorney) and a grand jury fore- 
man, the superior court may order sessions of tlie gand jury to be open 
to the public while investigating coi-ruption of public officers and 
employees. 

This statute was passed in 1937 in contemplation of an investigation 
of alleged misconduct by members of tlie Legislature including improper 
influences brought to bear by highly paid lobbyists for special interests. 
We are all familiar with the extended heai'iiigs held before the grand 
jury of Sacramento County in 1988, culminating in the so-called Phil- 
brick Keport, which enlightening document on corruption in the Legis- 
lature, has heretofore been delivered to you. These hearings were open 
to the public in accordance with section 92;)a of the Penal Code — the 
provision which this bill would repeal. 

I firmly believe open grand jury sessions, while investigating dere- 
liction of official duty, are a very salutary and desirable provision of 
law. The people are entitled to know the accusations made, and the 
testimony and evidence adduced, against their elected officials in whom 
they have reposed the highest confidence and the greatest trust. Every 
honest public official should welcome open hearings of any such accusa- 
tions. 

Much good is accomplished by the notoriety and publicity resulting 
from open sessions in such cases. The people, in whom reposes the 
ultimate power of sovereignty in a democracy, are at least fully apprised 
of conditions. If other action is not taken, the people still have reme- 
dies within their power. They should, and have, refused reelection of 
such officials. They should, and I hope will, force other reforms includ- 
ing remedial legislation. Through open, rather than secret sessions, 
such matters are thus placed squarely before the people for such action 
as they see fit to demand. 

Section 925a of the Penal Code has only been on the statute books 
two years. During this short time, it has fully justified its enactment. 
Deplorable conditions prevailing in the Legislature at the 1937 and 
other former sessions were, largely through the operation of this sec- 
tion, exposed to public view and opinion for the first time. Some 
reform has been accomplished. Much remains to be done. Reforms 



MESSAGES TO THE LEGISLATURE— 1 939 



29 



undertaken, and to a much greater degree yet to be accomplished, are 
and will be, in no small measure, attributable to the publicity resulting 
from the operation of section 925a of the Penal Code, sought to be 
repealed by this bill. 

This bill seeks to restore secrecy in grand jury investigations of 
charges or evidences justifying inquiry into the possible corruption of 
public officials. Open hearings and full publicity concerning the actions 
of any public official, which even border on corruption or constitute 
official misconduct, should be required, instead of being suppressed. 

Enactment of a bill such as this is a backward step which would 
contribute to the destruction of representative government by and for 
the people, and to the perpetuation of government by and for special 
interests. 

I am pleased to return this bill without my signature. I sincerely 
hope you refuse to enact it into law. 

Respectfully submitted. 



CULBERT L. OLSON 

Governor of California 



30 



STATE PAPERS AND PUBLIC ADDRESSES 



WORKMEN'S COMPENSATION INSURANCE 



State of California, Governor's Office 

Sacramento, May 4, 1939 

To the Honorable Members of the Assembly 
Sacramento, California 

Greetings : I strongly recommend to you the passage of a bill pro- 
viding that all workmen's compensation insurance shall be written 
exclusivel}^ in the State compensation fund. The only exception should 
be permission to those employers able and qualified to carry their own 
workmen's compensation liabilities to self-insure under proper restric- 
tions and safeguards. 

Primarily, to accomplish this result, section 3700 of the Labor Code 
should be amended to delete the present provision permitting employers 
to carry workmen's compensation insurance in private insurance com- 
panies. Assembly Bill No. 575 contains such an amendment and Senate 
Bill No. 1130 has similar provisions, although the latter bill as now 
written also prohibits self-insurance. 

Of course, for the sake of clarity and consistency, several other 
sections of the Labor and Insurance Codes should also be amended to 
conform with such change in the principal or basic section (section 
3700, Labor Code). These latter technical amendments could be pre- 
pared by the Legislative Counsel. But, in any event, with or without 
the technical amendments, if time prohibits the drafting or enactment 
of the latter, I strongly recommend to you the adoption of the funda- 
mental change in the law to require all workmen's compensation insur- 
ance, except for permissible self-insurance, to be written exclusively in 
the State compensation fund. 

My reasons for urging the enactment of an exclusive State fund 
for all workmen's compensation insurance in California are, in the 
main, briefly these: 

Under the present dual system of employers securing their work- 
men 's compensation insurance policies either from private companies 
or from the State fund, an unnecessarily large burden is carried by 
California industries for the maintenance of the workmen's compen- 
sation system. The premium cost of this insurance to employers can 
be reduced, without at the same time reducing, (in fact, increasing), 
the benefits paid to employees who are injured or killed in the course 
of their employment. 

Under the present system, an average of 40 cents out of every dol- 
lar paid by the employer in premiums for their workmen's compensa- 
tion insurance to private insurance companies, goes for the cost of that 
insurance. Not more than 59 i cents out of the premium dollar goes 
for the payment of insurance benefits for which the law provides. 

But when employers pay their premiums to, and are insured by, 
the State insurance fund, they receive a refund of a portion of this 40 
cents, which the State fund can pay them because of its much lower 



MESSAGES TO THE LEGISLATURE— 1 939 



31 



administration costs and because the State fund is not established to 
make a profit out of the injuries and distress of workmen and their 
dependents. 

There is absolutely no necessity for this premium toll of an average 
of 40 cents out of every dollar paid for workmen 's compensation insur- 
ance being taken from California's employees and their beneficiaries. 
Instead of 40 per cent, not more than 10 per cent, and probably less 
than 10 per cent, of the premium paid need be taken as the cost of all 
the benefits provided by the law. And that toll will not be taken if we 
amend the present law by providing that all workmen's compensation 
insurance premiums shall be paid to the State fund. 

The State fund now writes only about one-third of all workmen's 
compensation insurance written in California. Another third is written 
by several private companies organized and having their home offices 
here in California. The other one-third is divided among some forty 
other private companies having their home offices outside of California 
— some of them in foreign lands. 

Undoubtedly, the proportion of this insurance written by the State 
fund could be greatly increased if it engaged in expensive and useless 
advertising and solicitation for informing those employers, who are 
induced to have their insurance written by private companies, of the 
great loss they are thereby sustaining. 

Opposition to the elimination of private companies from any par- 
ticipation in our workmen's compensation insurance system may, of 
course, be expected from these private companies engaged in writing 
casualty insurance. Their interest is in making profits out of the sys- 
tem, regardless of the unnecessary cost to California's industries of 
their participation, and in delaying, minimizing and defeating payment 
of benefits to which beneficiaries of the law are entitled. 

This is a case where special interests conflict with the general pub- 
lie welfare, and sound economy and saving in an essential public 
service. 

Notwithstanding the competition of the private insurance com- 
panies, requiring the State fund to incur unnecessary acquisition and 
maintenance costs, it now costs the State fund only 14 per cent to 15 
per cent of its premium income to write workmen 's compensation insur- 
ance. Under the laws fixing uniform insurance rate premiums, the 
State fund is originally forced to charge the same rates as the private 
companies ; but the State fund, out of the premium paid it, has left at 
least 85 per cent to 86 per cent of its premium income with which to 
pay claims, as against less than 60 per cent left the private insurance 
companies with which to pay claims, if their records are properly kept. 

Savings to industry by insuring in the State fund are very sub- 
stantial. For the year 1937, these savings averaged nearly 23 per cent. 
It is obvious that if the State were to take over the writing of all work- 
men's compensation insurance, the rates could be reduced at once by 
about 25 per cent. This would mean a saving to California industries, 
for the benefit of employers and employees, of about $7,500,000 a year. 
And, based upon the experience of other States which have adopted 
exclusive State fund insurance for workmen's compensation, I venture 
the statment that a still greater saving may be realized ; that the admin- 
istration costs of exclusive State fund insurance would, as I have 



32 



STATE PAPERS AND PUBLIC ADDRESSES 



stated, be reduced to 10 per cent or less of the premium paid. Further- 
more, by exclusive State fund insurance for workmen's compensation, 
the thousands of employers who. in violation of the present law, fail 
to carry any insurance, and are unable properly to self-insure, can be 
more effectively compelled adequately to protect their employees 
against hardship and destitution arisinp: from occupational injuries 
where compensation is not now secured. 

Our other social insurances, old-atre benefit insurance and unem- 
ployment insurance, are universally compulsory and their administra- 
tion is a government monopoly. In fact, no one has ever seriously 
contended that private companies would be able to provide these 
insurances and undertake the risks involved. 

For the same reason, workmen's compensation insiirance should be 
written and administered exclusively by the State. It, also, is a social 
insurance and is universally compulsory. 

Lower premium costs would not be the only benefit to employers. 
They now make quarterly reports and premium payments for old-a<re 
benefit insurance and for unemplo;\Tnent insurance. They make these 
reports and payments on a pay roll basis. Under an exclusive State 
fund, they could also make their workmen's compensation reports and 
premium payments quarterly, with, and at the same time as their other 
social insurance reports, and from and by the maintenance of identical 
records. This would further reduce their own co.sts and simplify 
their keeping of records. 

Once the State has irathered tosrether the exclusive administration 
of all of these insurances, the work of auditinpr the accounts of employ- 
ers and the work of receiving: their premium payments can all be 
assigrned to a sing:le agrency in the State ofovernment. It will enable 
the concentration of these functions in a sinjjle office, with suitable 
branch offices througrhout the State. It will mean improved service to 
employers, to workers, and to the public lorenerally. 

An exclusive State fund for workmen's compensation insurance 
will also enable a much better standard of safety inspection, and more 
intensive safety educaticmal work in all branches of industry, com- 
merce and agriculture. Employers and workers generally have little 
realization of the beneficial results which safety education will prodiice. 
California's compensation insurance bill is now about $30,000,000 a 
year. Safety education will reduce this bill in half. But there will be 
an even greater saving — the social saving that vests by the prevention 
of death, misery and pain suffered by workers and their families from 
accidents which can be avoided. 

The la.st, but not the least important benefit to be gained by giving 
the State a complete monopoly of the writing of workmen's compensa- 
tion insurance is that of more generous benefits to workmen, and their 
families when, as is to some extent inevitable, laborers are injured or 
killed while at work. 

The State is not under any compulsion to make a profit for stock- 
holders. Therefore, it is in position to provide medical service of the 
highest quality and broadest scope ; likewise, to provide more generous 
compensation for loss of time and wages than is provided by present 
law. 



MESSAGES TO THE LEGISLATURE— 1 939 



33 



One of the true functions of government is to do for the people the 
things which they can not do for themselves, or the things which they 
are unable to do as well for themselves. The proposal that the State 
take over the writing of all workmen's compensation insurance serves 
this principle. 

I am convinced that in this field the State can do a better job, and 
at less cost, than is possible under the present system with its dfvided 
responsibilities. 

In the interest of real economy, as distinguished from the false 
economy preached by the special interests, I sincerely hope for favor- 
able action by the Legislature, and for the people's support, in the 
enactment of a bill into law, establishing this proposed improved 
system of workmen's compensation. 

Respectfully submitted. 



CULBERT L. OLSON 

Governor of California 



34 



STATE PAPERS AND PUBLIC ADDRESSES 



WAGES AND HOURS 



State of Californu, Governor's Office 

Sacramento, May 9, 1939 

To the Honorable Members of the Senate and Assembly 

I strongly recommend to you the passage of liberal legislation 
regulating minimum wages and maximum hours for industrial workers. 

Assembly Bill No. 167, authored by Assemblyman Yorty and 
eighteen other assemblymen is now pending before you. This bill is 
modeled upon the Federal Fair Standards Act of 1938. It is designed 
to make conditions prevailing in intrastate industry comparable to the 
conditions prescribed for interstate commerce. There is no difference 
in the efforts expended by the working man in completing his task 
whether in intrastate or interstate activities. Every reason and 
principle of just and equitable treatment demands similar reasonable 
working conditions for both classes of workers. 

We have had in California for a long time a minimum wage law 
for women. Unfortunately this remedial law has not received the 
degree of enforcement its merit deserves. The instant bill would 
extend such law to cover all industrial employees, male and female, 
and provide for them a living minimum wage and a workable maximum 
number of hours. 

The bill will particularly benefit the employee in the lower bracket 
wage scale. It will eliminate the sweat shop and require at least a 
subsistence wage. It will raise the standard of living to the level of 
human decency. 

Fully 90 per cent of all industrial workers now receive the wages 
equal to or in excess of the minimum scale mentioned in this bill — 
35 cents per hour for the first year of the operation of the act, 40 cents 
per hour during the next six years, and 45 cents per hour after the 
seventh year. At the present time the bill will require higher wages 
for only a. few workers— most employees now receive a greater recom- 
pense for their efforts. The gradual increase will be readily absorbed 
by the small percentage of industry affected. 

The same is true of the hours provision — eight hours a day and a 
44-hour week during the first year this act is in effect; eight hours a 
day and 42 hours a week during the second year thereafter; and 8 
hours a day and 40 hours a week after the second year this act is in 
effect. 

This bill will correct the evils prevailing in probably less than 10 
per cent of industrial employment. These evils, while relatively small 
compared to working conditions of all employees, are a constant source 
of friction. The bill will eliminate such industrial strife between 
employers and employees. 

The bill fully protects labor in its right to bargain collectively to 
obtain still more favorable wages, hours and working and living con- 
ditions. The bill fully protects the employer against any arbitrary 



MESSAGES TO THE LEGISLATURE— 1939 



35 



administrative action by proAdding for a court hearing and judicial 
review. 

The bill will create more employment, increase purchasing power, 
wages, and living standards. Surely this bill merits your attention 
and prompt, favorable action. 

Respectfully submitted. 



CULBERT L. OLSON 

Governor of California 



36 



STATE PAPERS AND PUBLIC ADDRESSES 



GOVERNMENTAL REORGANIZATION 



State of California, Governor's Office 

Sacramento, May 16, 1939 

To the Honorable Members of the Senate and Assembly 

I take pleasure in reeomTncndinfr to you several measures looking 
toward the improvement of the organization of the various fiscal agen- 
cies of the State gevernment. 

My predecessor, Governor Merriam, appointed a voluntary unoffi- 
cial committee of twenty-five persons to conduct a survey and make a 
detailed study of State Government departments and agencies, and to 
formulate recommendations for their reorganization. I am advised 
that this committee raised ahout seventy thousand dollars from private 
sources to defray the costs of such a survey and study. The committee 
employed Griffenhagen and Associates of Chicago, Illinois, nationally 
known experts in public administration, to make the survey and submit 
their recommendations. 

Although the committee and its consultants have made studies of 
the entire organization structure of the State Government, its ma.ior 
attention has thus far been given to the organization of the State's fi.scal 
agencies, including problems of general financial management and of 
revenue administration. The principal recommendations of Griffen- 
hagen and A.ssociates in these matters were adopted by the committee 
and formed the basis of a "Progress Report" published by the com- 
mittee in 1937. In this report the committee proposed a fundamental 
reallocation of the State's fiscal responsibilities and powers in accord- 
ance with a definite and losrical plan. The ma.ior recommendations of 
the committee were also embodied in a series of bills introduced at the 
1937 Session of the Legislature, but these measures did not then 
receive the careful consideration which they merited. 

I have given careful study to the committee's report and recom- 
mendations and to the various bills which contain the major features 
of its program. T have found in them definite proposals which merit 
the support of every thoughtful citizen. I need not emphasize that the 
problems involved transcend partisanship. Their wise solution is essen- 
tial to the best interests of the State and its people in the years to come. 
Accordingly, I urge the passage at this session of the Legislature of the 
bills and constitutional amendments introduced bv Senator Robert W. 
Kenny of Los Angeles which incorporate the principal recommendations 
of the committee. 

The first ma.ior projects deals with the State's organization for 
general financial administration. It is embodied in Senate Bill No. 164 
and Senate Bill No. 166, which, upon adoption by the Legislature, 
would be submitted to the people for validation under the accompany- 
ing Senate Constitutional Amendment No. 7 or Senate Constitutional 
Amendment No. 20. 

Public Administrators and scholars in the field are in general 
agreement upon the following as basic principles of sound fiscal man- 



MESSAGES TO THE LEGISLATURE— 1 939 



37 



agement: First, accounting and preauditing are primarily administra- 
tive functions, which should be lodged with a separate office or agency 
in the executive arm of the government. This principle derives from 
the simple fact that the current financial information which the account- 
ing system provides is indispensable to proper departmental manage- 
ment and budgetary control. If the chief executive is to discharge in 
practice as well as in theory his constitutional duties and responsibilities 
in the execution of the laws, the control of the State 's accounts must be 
vested in an official appointed by and answerable to him. 

Second, postauditing is i^rimarily an independent function, respon- 
sibility for which should be vested in an official independent of the 
executive and responsible either to the Legislautre or directly to the 
people. This principle rests upon the fact that the chief purpose and 
value of such an audit is to provide a continuing public review of the 
results of executive management. 

Third, within the limits of the policies fixed by the Legislature in 
the exercise of its established control over the purse, administrative 
control of expenditures and revenues should be vested in officials or 
agencies answerable to the executive, if proper executive responsibility 
is to be achieved and maintained. 

A cursoi'y examination of the present situation in California's 
State Government reveals that all of these principles have been grosslj' 
violated. In the first place, while the Governor is responsible for the 
State 's budget, his budget agency, which is the Department of Finance, 
is not authorized to maintain a system of central accounts for the State 
Government as a whole. Without such a system, truly effective budget- 
ing is impossible. At present these central accounts are maintained by 
the State Controller, while the detailed operating accounts are main- 
tained by the various spending agencies as prescribed by the Depart- 
ment of Finance. Moreover, there is no effective tie-in between the two 
sets of accounts since each is kept upon a different basis. The present 
division of accounting duties not only hampers effective budget control, 
but often results in confusion as to the true fiscal condition of the State. 

With respect to preauditing, that is, the checking of receipts at the 
time of collection and the examination and approval of expenditures 
before payment, we find a similar division of responsibility. The State 
Controller audits claims before payment and checks receipts before 
deposit in the treasury. In contrast, he does not have the responsibility 
of preauditing orders, contracts, or other encumbrances, for conformity 
with budgetary provisions, nor does he possess the records required for 
this purpose. This phase of the preaudit, so necessary for budgetary 
control, is performed by the Department of Finance. Such a divided 
preaudit is illogical, as well as unnecessarily cumbersome and expensive. 

On the other hand, the function of postauditing is performed by 
the Department of Finance. An executive department is thus put in 
the inconsistent position of both preauditing and postauditing govern- 
mental expenditures. The administration is called upon virtually to 
postaudit itself, since the Department of Finance is part and parcel of 
the administration and is actually a party to many of the transactions 
it is expected to audit. Thus the independent review of the methods, 
operations and results of executive management, which sound fiscal 
principles require, is entirely absent. 



38 



STATE PAPERS AND PUBLIC ADDRESSES 



Under the reorganization bills, above referred to, the Department 
of Finance would be given sole responsibility for accounting, preaudit 
and approval of receipts and disbursements, as well as budgeting, pur- 
chasing, property control, financial reporting and related procedures 
which are essential to a complete system of financial administration. 
This responsibility is fixed by Senate Bill No. 166, wliich establishes a 
Fiscal Code to govern departmental budgeting, the incurring of obli- 
gations, the control and collection of accounts receivable, the payment 
of claims and other financial matters. The code also prescribes the 
general fiscal and preaudit regulations and requirements. 

The above plan of reorganization, as embodied in Senate Bill No. 
164, would provide for a separate constitutional officer, to be elected by 
the people and to be known as the Auditor General. This officer would 
be charged with the sole responsibility for postauditing. lie would be 
required to make a current, continuing audit of the finance and revenue 
departments and of the State Treasurer and periodic postaiidits of all 
other State agencies. The purpose of these audits would be not only 
to detect and report violations of fiscal laws or the terms of appropria- 
tion acts, but also to determine that proper methods and controls were 
being maintained. The Auditor General's continuing audit of the 
Department of Finance would provide a current review of the deter- 
minations of that department as to the legality and propriety of expend- 
itures by State agencies. In doubtful cases reference could be promptly 
made to the Attorney General for his opinion. In a word, the Auditor 
General would serve as the agent of the tax-paying public, generally, 
to stop irregularities and to turn the full light of publicity upon any 
violations of duty by the officials of the administration. 

The Auditor General would be the successor to the State Controller. 
Under Senate Bill No. 164 and Senate Constitutional Amendment No. 7, 
or Senate Constitutional Amendment No. 20, the State Controller would 
become the Auditor General, charged as such solely with the responsi- 
bility of continuous postaudit of the State's fiscal transactions. 

The second major reorganization proposal is to centralize the col- 
lection of all State taxes in one separate State department. 

The growth of State Government has necessitated the addition of 
several new taxes to the fiscal structure during the past thirty years. 
Curiously, almost every new revenue measure of major importance has 
provided a new or different State agency to collect the tax imposed 
thereby. So today we find the State Controller collecting the inherit- 
ance tax ; the Franchise Tax Commissioner collecting the bank and cor- 
poration franchise tax and the personal and corporation income taxes; 
the State Board of Equalization collecting the sales tax, use tax, and 
the liquor taxes, as well as certain taxes on motor vehicles and gasoline. 
Still other automobile taxes are collected by the Motor Vehicle Depart- 
ment. "With respect to the gross premiums tax upon insurance com- 
panies, there are at present three agencies concerned in its administra- 
tion — the Insurance Commissioner, the Board of Equalization, and the 
State Controller. Such division of responsibility is incompatible with 
efficient administration. 

The inevitable result of this state of affairs is that confused tax- 
payers are forced to deal with several State agencies having inde- 
pendent jurisdictions and to make numerous returns to separate 



MESSAGES TO THE LEGISLATURE— 1 939 



39 



ofSces in order to pay their taxes. This is not only inconvenient, annoy- 
ing, and expensive to taxpayers, but involves a waste of administrative 
energy, time, personnel and money. Moreover, State taxes fall due 
at different times, with the result that in each of the present collection 
offices there are periods of peak load followed by periods of relative 
inactivity. If all taxes were collected by one agency, the work could 
be so staggered that it would proceed at a more even pace throughout 
the year. As a result, extra personnel could be eliminated and sub- 
stantial economies realized. 

Equally important is the effective correlation of the enforcement 
machinery set up in connection with each tax which their administra- 
tion by a single agency would make possible. Such correlation would 
undoubtedly result in a considerable increase in the revenues collected 
through making evasion more perilous and difficult. Honest taxpayers 
would also be benefited by a greater consistency and uniformity of 
administrative rulings on related questions arising under different 
tax laws. 

Senate Bill No. 165 is the reorganization bill which would consoli- 
date these functions in a single Department of Revenue following its 
submission to the people after adoption by the Legislature, and its 
validation under the accompanying Senate Constitutional Amendment 
No. 7. The experience of the Federal Government, with its Bureau of 
Internal Revenue, and of States such as New York, which have followed 
a similar policy of tax administration, provide persuasive evidence of 
the practical soundness of the plan. 

This bill creates a new Department of Revenue following the 
standard departmental form and procedure. All duties are vested in 
the department in charge of a director. Divisions are created within 
the department and all duties of a like class would be allocated by the 
director to such divisions. 

Your especial attention is directed to the fact that the status and 
rights of all employees in the State civil service now engaged in tax 
collection are fully preserved and protected under said Senate Bill 
No. 165. Such employees, without change in rights, would become the 
employees of the new Department of Revenue. You are likewise 
reminded that Senate Bill No. 165 in no way alters or changes the 
existing tax laws or imposes any new or additional taxes whatsoever. 
It merely provides that the existing tax laws shall be administered 
and taxes collected by a new, single department rather than by diverse 
State agencies as at present. 

This reorganization bill (Senate Bill No. 165) in its present form 
would also provide a Board of Tax Appeals so that any person paying 
a tax under protest would have prompt, quasi-judicial review of his 
grounds of protest, and in a proper case forthwith secure a refund. 
Bona fide disputes sometimes arise as to whether any tax is due or as 
to the correctness of the amount of the tax assessed. At the present 
time, both the administrative and judicial redress allowed the tax- 
payer, is very cumbersome, costly, and unsatisfactory to all concerned. 
Such a board of review would provide a simple, expeditious remedy for 
such cases. In lieu of creating a new body for this purpose, however, 
you might consider the advisability of vesting these reviewing functions 



40 



STATE PAPERS AND PUBLIC ADDRESSES 



in the Board of Equalization, thus making it a board of equalization 
and review. 

These reorganization bills would at the same time restore the 
Board of Equalization more nearly to the status and purpose for which 
it was originally created, namely, as a Board of Equalization of assess- 
ment of State and county taxes. At the present time this primary 
function of the Board of Equalization is relegated to a secondary 
position by virtue of the incongruous mixture of unrelated administra- 
tive duties which have been imposed upon it by the Legislature. 

The most striking of these unrelated functions is the work of this 
board in the regulation and licensing of the liquor traffic. Another 
important reorganization measure, Senate Bill No. 957, proposed to 
divorce liquor regulation from the State Board of Equalization. 
Liquor control presents a major and peculiar problem of governmental 
supervision. Its regulatory aspects are not germane to taxation. 
Senate Bill No. 957, after submission to the people following adoption 
by the Legislature and validated by Senate Constitutional Amendment 
No. 21, would create a separate Department of Alcoliolic Beverage 
Control. In usual form, following the plan of other State departments, 
including the new Department of Revenue above mentioned, a Director 
of Alcoholic Beverage Control would be vested with powers of general 
supervision over all functions of the department. An advisory board, 
which would hear appeals from the director's orders and regulations, 
would also be created. This board woidd exercise the same reviewing 
functions now performed by the State Board of Equalization in review- 
ing administrative action of the present State Liquor Administrator. 

Your attention is especially directed to the fact that no change 
whatsoever is made by Senate Bill No. 957 in the Alcoholic Beverage 
Control Act or the present regulation of the liquor traffic. Again, the 
present civil service status of existing employees is preserved and pro- 
tected. 

Lastly, may I specifically remind you that no one of the.se projects 
and none of these reorganization bills will become effective unless and 
until validated by constitutional amendment submitted to the people 
at the next general election. You are not enacting or effecting such 
reorganization or any part of it. You will be merely sidnnitting such 
projects and each part thereof to the people for their action. Surely 
it is the j)rivilege, right and duty of the people to pass on measures 
vitally affecting the efficiency of their own government. If you fail to 
pass these bills and constitutional amendments, yours will be the respon- 
sibility of denying to the people their prerogative and right. On the 
other hand, if no other proposal in the way of new and constructive 
legislation is enacted at this session of the Legislature, the adoption 
and submission of these measures would at least be an accomplishment 
of substantial value. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 



FIFTY-THIRD LEGISLATURE 
FIRST EXTRAORDINARY SESSION 

Convened January 29, 1940 



MESSAGE UPON CONVENING 



State of California, Governor's Office 

Sacramento, January 29, 1940 

Members of the Senate and Assembly 
of the California Legislature 

Your special session, called to convene on this date, is held in 
accordance with your own plans at the conclusion of the regular session 
last year in recognition of the fact that the funds you appropriated 
for unemployment relief would be exhausted at about this time and of 
the State's inescapable need for new revenue, which you failed to 
provide at the regular session. 

unemployment relief 

In considering and determining the amount of your appropriation 
to the Relief Administration and the Relief Commission for continu- 
ation of unemployment relief during the remainder of the present 
biennium, it is my duty to present to you the following information 
and carefully considered estimates : 

. During the 90th fiscal year, ended June 30, 1939, there was 
expended for unemploj^ment relief the sum of $42,577,872.71. The 
corresponding figure for the first six months of the current fiscal year 
was $27,152,279.75. The unexpended balance of the $35,000,000 appro- 
priated for relief at your regular session last year, as of December 31, 
1939, was $7,847,720.25. Although this balance is sufficient to carry 
a portion of the present case-load for the next twenty days, because of 
the time required for administrative operations, audits and check 
writing by the State Controller, no new intake or further relief pay- 
ments can be made after February 5. If your appropriation of funds 
for the remainder of the biennium can not be made before that date, 
it will be necessary for me to ask for an emergency appropriation. 

Based upon carefully prepared estimates of need, an appropriation 
of $95,500,0000 for relief is necessary to carry on for the balance of 
the biennium. This estimate is predicated upon the continuance of 
the same basic rules of eligibility as to destitution and residence and 
the same minimum budgetary standards that have been in effect since 
the inauguration of the program pursuant to the Unemployment Relief 
Act of 1935. It is also predicated upon a continuance of the present 
scope of Federal W.P.A. employment and all other factors involved. 

While the total sum to cover existing needs for which this appro- 
priation is urged appears large, it should be understood that approxi- 
mately 350,000 persons within the State draw their entire subsistence 
therefrom. Tliis large proportion of our population faces starvation 
unless these funds are provided. 

Only 4 per cent of the entire amount of the appropriation required 
is proposed for expenditure upon our works program designed as an 
attack on the whole dole system by way of gradually making the 
unemployed self-supporting. 

[43] 



44 



STATE PAPERS AND PUBLIC ADDRESSES 



Economies in administering the program have been instituted. 
Others are in the process of development, such as a continuous inde- 
pendent audit of the relief rolls by the Department of Finance, which 
I am recommending, and the efficient functioning of the S.R.A. Per- 
sonnel Standards Board, which I have recently appointed. 

From time to time restrictions have been urged with a view to 
decreasing the total cost of unemployment relief. Included among 
these have been the fixing of a ceiling of $65.00 for monthly family 
budgets, the establishment of a three year State residence requirement 
for relief, and the establishment of still more rigid rules for eligibility 
than have heretofore been adopted. Should the Legislature adopt all 
these restrictions, I am advised that a saving of as much as $30,000,000 
may be effected. If this should be your action, the appropriation neces- 
sary for the remainder of the biennium will be $66,000,000. 

However, I submit that no such reduction is possible without 
causing untold misery and hardship. 

These estimates are shocking to me, as they no doubt are to you. 
In my budget message last January the total amount estimated for 
imemployment relief during the current biennium was $73,660,000. 
That estimate did not contemplate the drastic W.P.A. curtailment 
which followed, throwing back onto S.R.A. 30,000 case-loads. The 
W.P.A. case-load was thereby decreased from 67 per cent to 46 per 
cent of the total unemployment relief load of the State, while the 
S.R.A. case-load further augmented by normal increases due to popu- 
lation rise and displacement from other employments, has increased 
from 33 per cent to 54 per cent of the total aid. On December 14, 
1938, its case-load was 59,000; on December 13, 1939, it was 100,000. 

We would all condemn any laxity in accepting relief cases ; any 
relief generosities inspired by political consideration; any waste or 
inefficiency in the administration of relief. But, obviously, if sporadic 
instances of such things are found by our intensive drives to prevent 
them, the total of increased or unnecessary costs attributable to such 
instances would be negligible. The.v can not truthfully be considered 
a factor in accounting for the tremendous increase in the S.R.A. case- 
load and in the cost of unemployment relief. 

As to costs of the administration of relief, I have insisted that 
continuous effort be made to reduce the same to not more than 15 per 
cent, which is considerably below the cost thereof during the previous 
administration. Progress has been and is being made in lowering the 
administrative costs to that level or below it. I do not believe the 
cost of administration need be higher. As an aid in keeping the cost 
within that limit, T recommend that provision be made in your appro- 
priation that the costs of administration shall not exceed 15 per cent. 

In considering the extent to which the relief load may be decreased 
by a pick-up in business activities and employment opportunities, we 
should bear in mind the highly important fact that the number of 
unemployed who receive relief is the smaller part of the total number of 
employable unemployed men and women in the State who are seeking 
jobs. Available statistics show that on November 30, 1939, approxi- 
mately 176,000 cases, representing 228,000 workers in California, were 
receiving unemployment relief from all unemployment relief agencies — 
the S.R.A., the W.P.A., and the Farm Security Administration. At 



MESSAGES TO THE LEGISLATURE— 1 94O 



45 



the same time there were in the State between 550,000 and 600,000 
unemployed workers, approximately 350,000 of whom were receiving 
no relief at all. 

It is these unemployed workers, not on relief, who are the tirst to 
return to private employments during any upswing in industrial 
activities. Their resources are generally greater, which is one impor- 
tant reason they are not on relief; their employment records are more 
recent, their health is better, and in a general way they are more 
employable than those on relief and thus have the advantage in compe- 
tition for a limited number of jobs. 

THE state's need FOR ADDITIONAL REVENUE 

The State's need for additional revenue is, of course, well known 
to you, as it is to all persons familiar with the fiscal condition of the 
State. We face serious financial problems in meeting the fixed charges 
of the Constitution, the requirements of the laws passed by the Legis- 
lature, the operating expenditures which you have budgeted, and your 
appropriations for unemplovment relief. 

On June 30, 1939, the General Fund deficit was $38,711,723. Since 
adjournment of your regular session last June without providing addi- 
tional revenue, that deficit has been and is still increasing at the rate 
of $2,400,000 per month. 

■ An appropriation for relief of $66,000,000, the minimum and inade- 
quate figure already mentioned, when added to budgeted appropriations 
and fixed charges now in force, will bring authorized General Fund 
expenditures for the 1939-1941 biennium to a total of $397,797,173. 
Existing revenue laws, on the other hand, are estimated to yield only 
$351,486,923 to the General Fund during the same two year period. 
This leaves a current budget deficiency, or shortage of revenues, with 
which to meet required expenditures for this present biennium amount- 
ing to $46,310,250. This sum, added to the carry-over deficit of $38,- 
711,723, inherited from previous administrations, means unless you 
provide new revenue at this session, that on June 30, 1941, the State 
would be confronted with an accumulated deficit in excess of $85,000,- 
000. This would be by far the largest deficit in the history of the State 
and would seriously threaten its credit. 

Thus far the deficit has been financed through the sale of General 
Fund warrants to banks and other financial institutions. Nearly 
$92,000,000 of these warrants are now outstanding. It is expected that 
the total will mount as high as $108,000,000 by the end of the biennium, 
unless you enact new revenue measures at this session. I am compe- 
tently advised that we are rapidly approaching a saturation point 
beyond which it will be difficult, if not impossible, to find a market for 
the State 's warrants. If our warrants can not be sold under the present 
system, the State will be forced to return to the procedure of issuing 
registered warrants to each of its State employees, and to merchants, 
contractors, and other individual creditors, who would find difficulty 
in converting them into cash, except at heavy discounts. Such a situa- 
tion in the State's financial affairs would be chaotic. 

Moreover, the interest charges alone on this mounting registered 
warrant debt constitute a heavy burden on the taxpayer. Such charges 



46 



STATE PAPERS AND PUBLIC ADDRESSES 



will amount to $3,800,000 during the present biennium, equivalent to 
the entire receipts from the State 's tax on beer and wines. 

Ordinary prudence and common business sense in the management 
of the State's fiscal affairs imperatively demands that measures be 
adopted now which will at least balance the budpret for the current 
biennium and prevent any further increase in the accumulated deficit. 
Common sense should indicate the wisdom and economy of immediately 
adopting a relatively moderate additional revenue program rather than 
facing the necessity of making the radical increases which would be 
necessary eighteen months hence, if you continue this mounting deficit. 

Estimates by the Department of Finance of receipts to be derived 
under existing law have been carefully prepared. Every effort has 
been made to foresee probable trends of economic conditions and to 
make allowance for continued improvement in California bn.siness. It 
is anticipated that tax receipts under existinir laws will be the largest 
in the history of the State. These anticipations agree almost exactly 
with forecasts made independently by the State agencies administerine 
the respective taxes, and are considerablv in excess of estimated 
General Fund revenue receipts as projected bv the State Controller. 
It is possible, of course, that a marked and proloncred increase in busi- 
ness and prices above the levels of 1937 would result in greater revenue 
than is now estimated. There is no positive assurance at the present 
time, however, that the business pickup will attain anv such propor- 
tions, unless induced bv demands arisinsr out of intensified war activi- 
ties abroad. In the latter event the State should prepare for the inevi- 
table dislocations which would accompany the cessation of such a war. 
We should husband anv additional recpints occurring bv reason of war- 
time prosperity, to wipe out all past deficits and to cushion the certain 
shrinkage in the State revonues that would result from an ensuing 
depression. Those who claim the State's buderet will be balanced 
through increased prosperitv must prove their case. They must be 
prepared to take the responsibility for any policies adopted as a result 
of accepting their views. T?espo7isibility for failinsr to balance our 
buderet can not be escaped bv acceptinnr assertions made in behalf of 
those who would avoid their just share of the tax burden. It is unstates- 
manlike and unbusinesslike to gainble with the financial soundness of 
the State. 

T, therefore, emphasize that you are called in this special session to 
enact such revenue measures as will produce, in the remaining seven- 
teen months of the current biennium, receipts sufficient to balance the 
1!).?0-1P41 budtret. and to reduce the carrv-over deficit by approximately 
*4. 000, 000. On the basis of the minimum mentioned as your possible 
appropriation for unemployment relief, additional revenue amountinsr 
to $50,000,000 in the present biennium would be reouired to accomplish 
that objective. If vou make provision for anv further appropriations 
at this session, as for instance further old a"-e securitv assistance, the 
amount of additional revenue required therefor must be added to these 
figures. 

Before suggesting or recommendiner to vou definite sources of new 
j'cvenue and specific measures to obtain it. I wish to restate my concept 
of the fundamental principle which should control taxation. Taxes 
should have a direct relationship to ability to pay. Governments should. 



MESSAGES TO THE LEGISLATURE— 1 94O 



47 



SO far as possible, avoid those levies which fall with particular severity 
upon low income p:roups, and should utilize taxes which increase in 
accordance with the income of the taxpayer. In keeping with this 
principle, it is obvious that the State of California should not increase 
its present retail sales tax nor enact a general gross receipts tax. It 
should not levy a property tax for State revenue. Each of these pos- 
sible means of raising additional revenue would throw the State tax 
system further out of balance on the side of regressive taxation. It 
would operate to further curtail consumption, and increase unemploy- 
ment. 

Sound, equitable and progressive principles of taxation require 
that additional revenue, needed to continue the essential services of 
government and maintain the State's credit, be obtained through adjust- 
ments in net income taxes; a severance tax on the depletion of our rich 
and irreplaceable natural resources; levies upon luxuries and non- 
essential items of con.sumption. Such measures, together with legisla- 
tion to close loopholes in our existing tax laws, and increases in horse- 
racing license fees, will provide ample revenue to meet the State's cur- 
rent fiscal emergency. Therefore, T suggest to you the following reve- 
nue sources and recommend the enactment of tax measures which will 
yield therefrom the funds necessary to balance the current State budget. 

In order to expedite your consideration of such measures I have 
had bills prepared for introduction, specifically responding to the 
suggestions here outlined. 

PERSONAL INCOME TAX 

Adjustments in Rates 

A comparative analysis of State personal income taxes in the 
United States shows that the tax imposed in California upon annual 
incomes of $50,000 or less is well below the average tax in other States. 
Today the California taxpayer with $.5,000 of taxable net income pays 
a State income tax of only $50. This is extremely low when compared 
with the $245 required in Oregon, $210 in New York, or $139 in Minne- 
sota and Iowa. An adjustment can be made in the present rate sched- 
ule sufficient to produce from $5,000,000 to $10,000,000 a year in 
additional State revenue without placing an undue hardship upon the 
citizens and residents of California. 

Personal Deduction 

The present income tax law allows the taxpayer a flat exemption 
of $1,000 if a single person, or $2,500 if married or the head of a family 
and a credit of $400 for each dependent. Personal exemptions and 
credits for dependents are, of course, entirely equitable features of anj 
income tax. However, under our existing law they operate as a deduc- 
tion from net income in computing the amount subject to taxation, 
with the result that the smallest taxpayer is granted a reduction in tax 
liability equivalent to $10 if he is single, or $25 if married, and the 
equivalent of $4 for each dependent. The largest taxpayer, on the 
other hand, is granted a reduction in tax liability of $150 if single, 
$375 is married or head of a family, and a credit equivalent of $60 for 
each dependent. California might well follow the lead of five other 



48 



STATE PAPERS AND PUBLIC ADDRESSES 



income tax states by providin«r a credit against tax in the amount of 
$10 for each single person, $25 for each married person or head of a 
family, and $4 for each dependent. If this change were made, all 
taxpayers would be treated impartially, and the State would receive 
from $2,000,000 to $7,000,000 additional tax revenue per year, depend- 
ing upon the rate schedule adopted. 

Loophole-Closing Amendment x 

Under the present law many taxpayers are allowed to take large 
deductions on account of interest and taxes with respect to the pur- 
chase and ownership of expensive pleasure yachts and ears, valuable 
jewelry, and expensive re.sidences and estates, thereby greatly reducing 
the amount of income taxes they pay. Such expenditures are personal 
or living expenses and should be disallowed as are other personal or 
living expenses in the computation of income taxes. In order positively 
to as.sure that the equitable feature of this change in the law would not 
operate to impose additional burdens upon the ownership of homes by 
per-sons of moderate means, any taxp.nyer should be allowed a deduction 
from gross income in the amount paid out for interest and taxes, but 
not to exceed $500 for any taxable year. Tt is estimated that this revi- 
sion in the law would produce approximately $700,000 additional reve- 
nue per year under the present rate schedule, and substantially in 
excess of this amount if the tax rates were increased. 

Treatment of capital gains and losses is a perplexing problem in 
determining an equitable method of taxing incomes. Approximately 
$900,000 in additional taxes could be obtained by amending the pres- 
ent law to provide that gains from the sale of capital assets shall be 
accorded the same treatment as other gains, that capital losses may be 
deducted from capital gains, and that the excess of losses over gains 
in a particular year may be deducted from gains in a subsequent year. 
"While immediate additional revenue would result from such a change 
as that outlined, it should be observed that a decrease in revenue below 
that obtaining under the existing law would result during periods of 
great financial crisis and deep depression. At such a time los.ses would 
offset gains, with the result that the State would receive little revenue 
from investment operations of its income taxpayers. 

Two further amendments to the personal income tax law should 
be considered, although in each instance the amount of additional reve- 
nue realized would be extremely small as compared with that which 
would result from the changes above outlined. Income from trusts 
established by parents for the support of their minor children should 
be taxed to the parent ; and deductions for gifts and donations should 
be limited to gifts and donations actuallj'- made during the taxable year, 
and, where consisting of property, the deduction .should be limited 
to the cost of such property to the taxpayer. The former amendment 
will close one of the loopholes most frequently utilized by wealthy tax- 
payers; the latter involves only a strengthening and simplification of 
the present law with respect to gifts and donations. Sufficient informa- 
tion is not available from which an accurate estimate could be given 
of the additional revenue that might be thus realized ; but its amount 
would be comparatively small. 



MESSAGES TO THE LEGISLATURE— 1 94O 



49 



It should be pointed out that any upward adjustment in the pres- 
ent rate schedule would result in corresponding increases in the income 
to be derived from these loophole-closin"' amendments. 

BANK AND CORPORATION FRANCHISE TAX 

T ax Rates 

Banfe and corporations operating in California pay a franchise 
tax in accordance with the amount of net income earned on their opera- 
tions. In keeping with the principle of taxation according to ability 
to pay and in view of the present financial needs of the State, the Legis- 
lature should re-appraise the present rates imposed under this tax law. 
An increase from 4 per cent to 5 per cent in the rate on general corpo- 
rations and from a maximum of 8 per cent to a maximum of per cent 
in the bank tax rate would produce approximately $5,000,000 in addi- 
tional revenue annually. 

Minimvm Tax 

Under the Bank and Corporation Franchise Tax Act, corporations, 
regardless of their size and the extent of their operations, are required 
to pay a minimum tax of only $25 per year. With such a provision in 
elfeet, if no net income is realized, a corporation having an investment 
of many millions of dollars in this State pays the same for its operat- 
ing franchise as a small firm with an investment of only a few thou- 
sand dollars. The privilege of doing business as a corporation is of 
immense value to the company with large holdings, regardless of the 
temporary condition of its current income. It is recommended, there- 
fore, that the minimum tax provision of the franchise tax act be 
amended to require a minimum tax of $25 per year or an amount equal 
to one-twentieth of one per cent of the corporation's assets situated in 
California, whichever is the larger, but such minimum tax in no event 
to exceed $10,000. This change in the existing law would result in 
additional taxes amounting to $2,200,000 per year. 

Loophole-Closing Amendmen ts 

Three loophole-closing amendments should be considered with a 
view to strengthening the present Bank and Corporation Franchise 
Tax Act. These, in brief, are as follows : 

1. Provide that inter-corporate dividends should be treated in the 
same manner as other income in computing the franchise tax, 
except where the subsidiary corporation is at least 95 per cent 
owned by the taxpayer corporation. Present provisions of the 
law with respect to the taxation of dividends received by cor- 
porations present one of the most vexing problems of adminis- 
tration of this tax. An amendment such as that outlined not 
only would produce approximately $400,000 additional yearly 
revenue at the present tax rate and $500,000 with a one per cent 
increase in rate, but also would materially reduce the cost of 
administering this tax. 

2. Disallow the deduction for interest on notes or other evidence 
of indebtedness if the obligation to pay interest upon such 
indebtedness is conditioned upon or measured by the amount of 



50 



STATE PAPERS AND PUBLIC ADDRESSES 



earniiiofs or profits of the taxpayer corporation, or if the evi- 
dence of indebtedness has no fixed date of maturity. 

3. Strengthen the existing law to prevent avoidance of tax by con- 
tractual arrangements between affiliated corporations. 

4. Amend the franchise tax act with respect to gifts and dona- 
tions as outlined above for the personal income tax. 

No accurate estimates of additional revenue that may be realized 
from the last three amendments itemized are available. 

ALCOHOLIC BEVERAGE TAXES AND LICENSE FEES 

In comparison with similar taxes in other States the present State 
excise taxes on distilled spirits, beer and wine are very low. An 
increase in the tax on distilled spirits from the present rate of 80 cents 
per gallon to the national average of approximately $1.00 per gallon 
would produce an additional $2,000,000 per year, while an increase in 
the tax on beer from 3 cents to 5 cents per gallon (the national aver- 
age) would result in $2,400,000 more revenue than is now received 
from that source. 

With respect to the tax on wine, the present California rate is 
below that of any other State. An increase to the lowest rates in effect 
elsewhere, namely 5 cents per gallon on dry wine and 10 cents on 
sweet Avine, would produce annually $1,300,000 more in sorely needed 
State revenue. ' Certain of the present liquor license fees can be 
adjusted with equity. It should be possible to obtain at least $1,400,000 
per year for the State General Fund through adjustments in the charges 
for these licenses. In connection with the increases recommended here, 
it should be noted that these excise taxes and fees are levied upon non- 
essential items of consumption from which the taxpayer may well 
abstain, at least to the extent that he believes his indulgence is overtax- 
ing himself. 

INHERITANCE AND GIFT TAXES 

An amendment of the inheritance tax law involving a moderate 
increase in the rates on all inheritances except those under $25,000 
received by direct heirs was proposed at the regular session last year. 
This recommendation merits reconsideration. If adopted, it would 
produce additional revenue to the extent of $2,000,000 per year. 

The gift tax enacted in 1939 should also be amended to provide 
rates paralleling those now recommended under the inheritance tax. 
If this is done, at least $175,000 more can be anticipated from this 
source. 

se\t:rance tax 

Petroleum, natural gas, and natural gasoline are our richest natural 
underground resources. They are fugitive substances subject to cap- 
ture and drainage from the reservoirs and structures containing them 
wherever they extend. They are irreplaceable and will be exhausted 
in a comparatively few years, probably' during this generation. The 
consumer now pays heavy sales taxes on gasoline and other petroleum 
products, but the producer and royalty owner pay no tax to the State 
iu their exploitation and depletion of these natural resources. The 
principal argument of representatives of large oil producing interests, 
even before legislative committees, in opposition to a severance tax on 



MESSAGES TO THE LEGISLATURE— 1 94O 



51 



oil, natural gas and natural <rasoline, has been that it can not be passed 
on to the consumer. AH recognized authorities on taxation approve sev- 
erance taxes on mineral resources, such as oil, natural gas, and natural 
gasoline as a sound and equitable tax base. Nineteen states now have 
severance taxes on one or more of their natural resources, and in many 
of these states this is the source of a substantial amount of revenue. 
"With one exception, all other major oil-producing states have a sever- 
ance tax on petroleum production. California is the second largest oil 
and gas producing State. A two per cent tax upon petroleum, natiiral 
gas and natural gasoline as produced, would yield revenue amounting 
to approximately $6,000,000 per vear, while a three per cent tax would 
amount to $9,000,000. 

TOBACCO TAX 

In selecting sources of additional State revenue, consideration 
sliould be given to the enactment of a cigarette and tobacco tax in Cali- 
fornia. At the present time, twenty-five of the forty-eight States have 
imposed levies either upon cigarettes alone or upon all tobacco prod- 
ucts. It is estimated that a tax of 2 cents per package on cigarettes, 1 
cent per ounce on smoking tobacco, 1 cent on each cigar retailing for 
over 5 cents, and varying rates on other tobacco products, would return 
$8,250,000 in State revenue per year. Of this amount, approximately 
$5,800,000 would come from the 2 cent tax on cigarettes and the 
remainder, $2,450,000, from the tax on other products. 

MOTOR VEHICLE TRANSPORTATION LICENSE TAX 

The present three per cent gross receipts tax upon motor carriers 
applies only to operations upon State highways and does not extend 
to operations conducted within city limits. This appears to be an 
entirely arbitrary limitation, and this tax might well apply to all com- 
mercial operations in the State. In addition to the $1,200,000 of 
annual State revenue which would be obtained by extending this tax 
to city carriers, the administration of the existing law would be greatly 
simplified with respect to the determination of tax upon operations 
pai'tly within and partly without city limits. 

INSURANCE GROSS PREMIUMS TAX 

In view of the fact that the existing Insurance Gross Premiums 
Tax was established in 1921 and revisions in taxes upon other types of 
business have been made since that time, the insurance tax should be 
analyzed with a view toward obtaining an increase in the yield. This 
could be done by raising the existing 2.6 per cent tax rate or by 
eliminating certain deductions allowed under the existing law. An 
increase in the present rate to three per cent could yield approximately 
$1,300,000 annual revenue. At present, insurance companies offset 
taxes paid upon real property located in California against the gross 
premiums tax imposed by the State. The original intent of this pro- 
vision was to encourage and assist California insurance companies. In 
actual practice, however, the larger part of the benefit accrues to out-of- 
State companies having extensive real estate holdings here. Further- 
more, this benefit accrues to relatively few companies. In view of this 
fact, it would seem logical to amend the State Constitution to eliminate 



52 



STATE PAPERS AND PUBLIC ADDRESSES 



the so-called real estate offset. Althou{?h no additional revenue would 
be received durin.sr the current biennium, if this constitutional amend- 
ment were approved by the voters, approximately $1,500,000 more 
General Fund revenue would be received annually in subsequent 
periods. It has been held that dividends paid to policy-holders may be 
deducted in computing: taxable irross premiums. An amendment to the 
law disallowinfj this deduction would result in a $250,000 increase in 
the annual tax. 

HORSE RACING LICENSE FEES 

At the present time the license fee for conducting horse race 
meetings is 4 per cent of the money handled in the pari-mutuel betting 
pools operated in connection with such meetings. The revenue from 
this source is expended principally for the support of agricultural fairs 
throughout the State, and for the maintenance of agricultural schools. 
At your regular session last year, it was recommended that the State 
obtain a part of its needed General Fund revenue by imposing a gradu- 
ated fee ranging from the present 4 per cent to 8 per cent, depending 
upon the volume of money handled at any particular race track. It is 
estimated that a graduated fee of this type requiring 8 per cent of all 
amounts in excess of $10,000,000 would return approximately $1,500,000 
for the General Fund each year, and if the State takes all or any part 
of the "breakage," this return would be further increased very sub- 
stantially. 

$50,000,000 IN NKW REVENUE 

From the sources here outlined, a tax program to yield the $50,- 
000,000 necessary to balance the State budget during the current bien- 
nium can be obtained without violating the principle of taxation accord- 
ing to ability to pay and without having an unduly burdensome effect 
upon business or upon taxpayers generally. 

GOLDEN GATE EXPOSITION APPROPRIATION 

In order to assist the exposition on Treasure Island, in San Fran- 
cisco Bay, to continue in 1940, I recommend that an appropriation be 
made to the California Commission for the Golden Gate International 
Exposition. The only way, perhaps, that any of the $5,000,000 appro- 
priated and already expended by the State in the building and conduct 
of this fair will be realized, is in increased revenues from sales, gas, 
and other taxes which are augmented by the expenditures of fair 
visitors. There remains unexpended the sum of $550,000 of the $5,- 
000,000 originally appropriated for this exposition. The commission 
has presented a budget which calls for an appropriation of $591,756 in 
addition to this balance on hand of .$550,000. 

I am convinced that $430,000 in addition to the balance on hand 
is sufficient, and recommend such appropriation, and also an additional 
$85,000, which the commission may expend for maintenance and opera- 
tion of county exhibits which the county budgets have not included this 
year. These recommendations are made with the proviso that sufficient 
revenue be raised to meet such appropriations. 

The San Francisco Convention and Tourist Bureau and other 
interested civic and business groups have requested me to allow the 
consideration of an additional appropriation to the commission to be 



MESSAGES TO THE LEGISLATURE— 1 94O 



53 



expended for the purpose of bringing political conventions to the State 
during the fair. I am informed that an appropriation of $150,000 for 
this purpose might result in the success of their efforts to bring such 
conventions to San Francisco. I am as.sured that this would undoubt- 
edly bring large numbers of people to the fair, contribute to business 
activities and aid the fair's success in 1940. Such an appropriation, if 
made, should be ear-marked so that it will be returned to the General 
Fund in the event a convention of either of the two major political 
parties is not held in California in 1940. 

OLD AGE PENSIONS 

Another subject submitted for your consideration is that of amend- 
ing our old age security law so as to cancel and remove authority to 
secure liens or other claims against the small property holdings of 
recipients of old age assistance. 

The present provision authorizing boards of supervisors, in admin- 
istering this aid, to require agreements imposing such claims when 
exercised is, I am advised, of little net value to the State, county or 
Federal government, considering costs of its enforcement. Besides it 
places an unnecessary hardship upon many elderly persons deserving 
and eligible for old age assistance. 

I am advised that not more than 20 per cent of the eligible appli- 
cants for old age assistance have any interest — present or prospective — 
in any real property. Such interest, when found to exist, usually con- 
sists of doubtful equities held by those who have lived thrifty lives 
only to see their savings lost as a result of economic depression. Such 
persons cling tenaciously to the hope that changed conditions may take 
them out of the class of eligibles for old age assistance. 

I, therefore, recommend appropriate amendments to our ohl age 
assistance laws, so as to eliminate the lien on property agreement pro- 
visions found in sections 2226 and 2229 of the Welfare and Institutions 
Code. 

Liberalization of Old Age Assistance 

There is submitted to you also the question of reducing the age 
qualifications for the aid granted under our old age security law. The 
granting of such aid is now generally accepted as both a social responsi- 
bility and sound public policy. 

Old age assistance in California was first authorized by an act 
passed in 1929. It has been amended and liberalized by amendments 
adopted in the legislative sessions of 1931, 1935, 1936, and in your 
session of 1937. 

Along with its phenomenal growth in population, in capital invest- 
ments and industrial development, California, because of its marvelous 
climate and other natural advantages, has attracted elderly citizens of 
other states who come here to retire upon the savings of their productive 
years. In the decade prior to the depression of the past ten years, cham- 
bers of commerce and representatives of commercial and promotional 
activities, through systematic advertising urged such people to make 
their homes here and enjoy California's climate and agreeable environ- 
ment. As a result, there was an influx of elderly persons with resources 
adequate for their maintenance the rest of their lives. During the 



54 



STATE PAPERS AND PUBLIC ADDRESSES 



depression of the past ten years many of these elderly people lost their 
resources, incomes and their investments made in California. 

This fact, added to the displacement from private employment of 
people of advanced age, and the hardships, want and suffering gen- 
erally resulting from unemployment, has caused this State to take the 
lead in expressing sentiment in favor of old age pensions and the liberal- 
ization of existing old age assistance acts. 

The fact that this sentiment has at times been seized upon by self- 
seeking demagogues or racketeers primarily interested in propagandiz- 
ing for and securing contributions of huge funds in the promotion of 
unworkable schemes offering promises for payment of pensions to the 
aged which could not possibly be fulfilled, should not prejudice the 
principles of social justice. These call for liberalization of the Old 
Age Security Act to the maximum of the public's financial ability to 
pay. The tremendous support thus aroused and the sincerity of that 
support should rather be considered as a manifestation of conditions of 
hardship and destitution in which our elderly people find themselves 
and as their attempt to articulate their demands for relief. 

The platform on which I was elected declares: "For purposes of 
uniformity, old age pensions, in their entirety, should be financed and 
administered by the Federal government. Until that is accomplished, 
we shall favor State provision for the aged to the extent that public 
finances will permit. ' ' 

Up to now Congress has failed to provide for Federal financing and 
administration of old age pensions, still leaving it to the several states 
to determine whether they shall match or exceed the amounts presently 
given by the Federal government to the respective states toward old age 
assistance. This aid, as you know, now amounts to $20 per month. The 
State and counties of California are required under our present act to 
pay an equal amount on the basis of need to eligible persons who have 
reached the age of 65 years. 

On the basis of need and merit and from the standpoint of social 
justice senior citizens between the ages of 60 and 65 years are equally 
entitled to this assistance with those who have reached the age of 65. 

It is anticipated that the present session of Congress may at least 
extend to all eligible needy over the age of 60, the aid now given eligible 
needy who have reached the age of 65. I urge the Legislature to 
memorialize Congress to take that action. 

For California to do likewise and provide $20 per month to those 
over sixty would require approximately $12,000,000 per year, and 
remove many relief cases from S.R.A. Approximately 75 per cent of 
our present old age assistance cases comprise citizens who have resided 
in California more than 15 j^ears. The door for this aid is not open to 
newcomers. 

In view of the tax burden now carried by the counties and the 
clamor by the counties for the State to aid them in carrying their share 
of the amount required to meet the present old age assistance provisions, 
the counties can not very well be expected to carry a larger old age 
assistance tax burden at the present time. Any amendment made to 
lower the age limit from 65 to 60 should therefore provide for the pay- 
ment by the State of the full amount of assistance given to eligibles 
coming within that category. 



MESSAGES TO THE LEGISLATURE— 1 94O 



55 



This would mean that if $20 per month is immediately paid for old 
age assistance to those between 60 and 65, State revenues to the extent 
of $12,000,000 must be provided. If you provide for this additional 
revenue, which I recommend, in addition to revenue needed to balance 
the current budget, I also recommend that this liberalization of the 
present law be made immediately. 

If you do not provide for revenue to presently meet the require- 
ments of such an amendment, then in any event I recommend that such 
an amendment be made, to become effective whenever the Federal gov- 
ernment shall furnish the State the same Federal assistance for old age 
pensions to those between 60 and 65 as is now furnished to those 
over 65. 

In addition to such legislation and memorial, I also urge the 
passage of a memorial to the President and the Congress of the United 
States, asking that the Federal government take over the financing and 
administration of old age pensions in their entirety and provide, on a 
basis of need, at least $60 per month for all eligible citizens who are 
over the age of 60 years. 

STATE HOUSING AUTHORITY 

Another subject submitted for your consideration is legislation to 
create a State Housing Authority; to undertake slum clearance and 
projects ; to provide dwelling accommodations for persons of low income 
and to take advantage of the provisions of the United States Housing 
Act of 1937. 

There is now pending in the Congress of the United States a bill 
which doubles the present $800,000,000 program of the United States 
Housing Authority. It specifically earmarks $200,000,000 of said funds 
for the assistance of projects to provide housing for families of low 
income in rural areas. The State of California will be eligible to receive 
$80,000,000 of these funds for low cost housing, if this bill is passed. 
It is important, therefore, that legislation be enacted immediately to 
enable California to fully participate in this program. 

As you all know, the existence of unsafe, insanitary and unfit 
dwelling accommodations, particularly for migratory workers, has pro- 
duced an alarming economic and social condition in the State of Cali- 
fornia. From both our urban and rural districts has come the docu- 
mented stories of the menace of the slums to the health, safety, morals 
and welfare of the citizens of our State. 

Our housing problem, in its most acute form, is essentially a prob- 
lem of rural housing. 

Contrary to most public opinion, the State government, as such, is 
already deeply involved in the housing problem. The Relief Admin- 
istrator is spending millions in rent for the most miserable housing for 
relief clients. 

In the San Joaquin Valley counties alone, the State is spending 
from $100,000 to $125,000 a month for relief client rents; for shacks, 
hovels, cheap auto camps and tent camping space. The fruit of these 
rent payments is this : rural slums have become highly profitable to 
their owners, while demoralizing and destroying the health of their 
occupants. 



56 



STATE PAPERS AND PUBLIC ADDRESSES 



For a great many years, most of the seasonal agricultural workers, 
numbering from 175,OUO to 200,000 people, were aliens who left the 
rural valleys at the conclusion of the season. Today, as a result of the 
Dust Bowl influx, and many other causes, a very large percentage of 
these workers are Americans who are trying to settle down. Thousands 
of them have taken root and have become residents. 

These people have been housed in labor camps, shack towns and 
auto camps. Last year there were some 4500 farm labor camps with a 
population of 145,000. As the name implies, these camps are designed 
merely for temporary, seasonal occupation and are wholly inadequate 
for permanent housing. Last year the cotton camps were 60 per cent 
to 70 per cent occupied throughout the winter. The overcrowding was 
appalling, with as many as eight persons living in a one-room cabin. 

Many of these workers, not permitted to remain in the labor camps 
after the season, have moved into shack towns adjacent to the valley' 
cities and towns. These shack towns present a most distressing problem 
because tliey are located, for the most part, in areas not subject to 
adequate public regulations. They are mushroom communities, liimsy, 
luiplanned, unregulated and uncontrolled. For the most part, tliey are 
ilevoid of sanitary facilities. They are located on river banks, ditch 
banks and other unlikely spots. The housing is primitive, consisting of 
shacks, tents, lean-to's, and dugouts, shockingly overcrowded. 

Because of the peculiar origin and nature of California's rural 
housing problem, the only practical approach possible is from tlie point 
of view of the State as a whole. A housing authority predicated upon 
decentralization with initiative and responsibility assumed primarily by 
cities and counties serves very well and we alread}- have a few verj- 
active housing autliorities operating under the authority of our enabling 
acts passed in ]938. But, where rural housing is the major element, I 
find that it is the State, rather than tlie counties or towns, that must 
assume initiative and responsibility. This is true for a number of 
definite reasons. 

In the first place, the rural counties of California have shown no 
indication that they realize tlie seriousness of the problem, or tliat they 
accept tlie responsibility for doing anything about it. 

In the face of a growing housing shortage, which has been acute 
since 1935, no functioning authority has been established thus far in any 
of the rural counties. This demonstrates the necessity for State action. 

In the second place, for the purposes of planning, the State is in a 
much better position to view the problem in its broadest aspects and to 
plan on a much more comprehensive basis than any one county could 
possibly hope to do. The State is in a better position than any of the 
counties to analyze this problem and to locate housing projects where 
they are to be of the most benefit. 

In the third and final place, for the purposes of administrative 
economy and efficiency, a State Housing Authority offers many advan- 
tages over a number of separate, uncoordinated, independent county or 
small city authorities. Once a project has been constructed, admin- 
istrative expense becomes very important, because it has a direct bearing 
upon the amount of rent to be charged. A single State agency can 
manage many projects with much less overhead cost than if each project 
be a separate unit under a county authority. Likewise, the State can 



MESSAGES TO THE LEGISLATURE— I 94O 



57 



attack the job of construction with mass production methods, and build 
more cheaply, because of the larger scale of operations. The program, 
in other words, can be supervised as a whole, and the relation of every 
project to the other can be carefully weighed and considered. 

A State Housing Authority would operate essentially in the same 
manner as city and county authorities operate under the Housing 
Authorities Law of the State of California. However, the State Author- 
ity would not be empowered to function in any city or county in Cali- 
fornia where a local authority is authorized to function and is function- 
ing. I wish to make it clear that it is not the intention, in submitting 
a State Housing Authority bill, to permit interference of any kind with 
existing local housing authorities who are functioning, or who expect to 
function, under the provisions of the present Housing Authorities Law 
of California. 

The State Housing Authority should be composed of five members 
appointed by the Governor. Aside from the administrative expense for 
the first 3'ear of operation, the State would assume no direct obligation. 
All other funds would come from the United States Housing Authority. 

Practically no expense to the State is contemplated in this proposed 
legislation. The United States Housing Authority has informed me that 
the legislation, in the form in which it is to be introduced, meets the 
necessary Federal requirements. Therefore, I wish to caution against 
any changes in the form of the bill submitted, without the approval of 
the United States Housing Authority. 

PROPOSED AMENDMENT TO CENTRAL VALLEY AUTHORITY ACT 

By the narrow margin of two votes you failed to pass amendments 
proposed at your regular session last year to the Central Valley Author- 
ity Act which would enable California to keep faith with the Federal 
government and perform its duty to the people in the development of 
the Central Valley Project. 

I have considered carefully whether such legislation could be fur- 
ther delayed until the next regular session, without injury to the public 
interest and without ignoring requests received from the Federal 
administration. I am convinced that can not be done and that the need 
for this legislation is so urgent that it would be a dereliction of duty on 
my part if I failed to include it in the subjects submitted for your 
consideration. 

The Federal government will surely complete this project if Cali- 
fornia will do the things needed to be done and give the people its full 
benefit in the delivery to them, at the lowest possible cost, of the water 
and power from this project. That objective can only be obtained 
through public distribution. 

I have received messages from President Roosevelt, from the 
Secretary of the Interior, from the United States Commissioner of 
Reclamation, and others representing the Federal government, urging 
that the State place itself in a position to make provision for public 
distribution of power in the discharge of its responsibilities in connec- 
tion with this project. 

The State Director of Public Works and the executive officer of 
the Project Authority have advised me that such enabling legislation 
should be enacted at this special session. 



5—18527 



58 



STATE PAPERS AND PUBLIC ADDRESSES 



Immediately after the defeat at your regular session last j^ear of 
the so-called Pierovich Bill (Senate Bill No. 863) eontaininp; such 
le|»islation, United States Reclamation Commissioner John C. Page 
proposed that State and Federal representatives, together with local 
groups, continue consideration of the matter. 

During the fall numerous conferences were held and letters 
exchanged between the State and Federal governments concerning 
this needed legislation. Secretary of the Interior Ilarnld L. Ickes 
already had urged that the State concern itself with providing distri- 
bution facilities for the water and power from this project, and 
President Roosevelt telegraphed his endorsement. These conferences 
culminated in a two-day meeting in Sacramento in December, attended 
by Federal, State and local representatives. As a result of this meet- 
ing an amendment to the Central Valley Project Act was again drafted. 
That proposed amendment in simple language woiild free up to $50,- 
000,000 of the $170,000,000 of revenue boiuls authorized in the present 
act to be used by the State in carrying out the purposes and objects 
of the act itself. It would place the State in a position to contract 
with the Federal government for distribution of the electric power 
developed by the project, instead of leaving the Federal government 
and the people to be served at the mercy of a private power distribution 
monopoly which would be its only purchaser. 

Federal government officials are well aware of the need for haste 
in having this legislation enacted. They know the delays which follow 
if the distribution and marketing features of a project are left 
untouched until the project is completed. The Federal government 
and the people suffered loss from delays in providing for public distri- 
bution of power upon the completion of the Bonneville project in the 
State of Washington. Such a condition in California should be pre- 
vented by your action at this session. 

Providing the means for public distribution of the water and 
power from the Central Valley Project .should go hand in hand with 
the construction of the project, if the people are to realize the full 
benefits of both its water and power. 

In the last few weeks I have received many communications from 
all parts of the valley, urging that I include this necessary legislation 
in the agenda for the special session. Only last week a meeting of two 
hundred farmers from the San Joaquin and Sacramento Valleys, many 
of whom were officials of irrigation and reclamation districts, unani- 
mously adopted a resolution urging this action on my part. In vie\^ 
of its importance to the people of the Central Valley, to the Federal 
government and the State, I hope you will enact this proposed bill. 

LIQUOR CONTROL 

I am submitting for your consideration and recommending a con- 
stitutional amendment and fitting legislation transferring the adminis- 
tration and enforcement of laws relating to the licensing, regulation 
and distribution of alcoholic beverages from the Board of Equalization 
to a new State agency to be created. 

The Board of Equalization was originally created in 1879 to 
equalize property valuations for taxation purposes, as between the 



MESSAGES TO THE LEGISLATURE— 1 94O 



59 



counties; to assess the value of certain public utility properties, and 
generally to supervise tax law administration. 

Since that time other duties have been assigned, and the adminis- 
tration of other laws have been committed to this board, including the 
collection of gasoline and sales taxes, motor vehicle transportation 
taxes, etc., also that of administering and enforcing liquor control and 
liquor license laws. 

There is now a strong public demand that all liquor control 
administration be removed from the Board of Equalization and vested 
in another separately constituted State commission, exclusively devoted 
to that work. This will, I believe, accomplish better liquor control 
administration, and will allow the entire attention of the Board of 
Equalization to be devoted to its other manifold and important duties. 

During the past year this demand has become more general and 
more emphatic because of evils which have become very apparent in 
the board's administration of the liquor laws. Since the board mem- 
bei'S are directly elected by the people, various liquor interests spend 
huge sums of money to influence their election. As a result there have 
been recurring scandals in such elections as well as in connection with 
the performance of the administrative duties of the board. 

Furthermore, the vast amount of time and attention required in 
properly handling the administration of the liquor control laws and 
the perplexing problems in connection therewith, so as to maintain 
honesty and efficiency in the service and carry out the provisions of 
the laws intended to minimize the evils of the liquor traffic, makes it 
essential that these duties be performed by a separate State agency or 
commission. Naturally the other work and tremendously important 
duties of the Board of Equalization can not be handled as efficiently 
as it should be unless the board be relieved of the administration of 
liquor control laws. 

I therefore strongly urge that this be done, and that a separate 
State appointive commission be provided for to take over the entire 
administration and duties of administration of all State liquor control 
and liquor licensing acts. 

SAN FRANCISCO HARBOR OPERATIONS 

Recent and previous protracted tie-ups of the San Francisco 
Harbor, due to strikes and the inability of the waterfront employers 
and certain groups of their employees to adjust their differences, have 
resulted in huge losses to the public generally. 

In order to avoid such recurring interruptions of the normal 
movement of commodities shipped through the State's harbor facilities 
at San Francisco, I strongly urge you to enact legislation enlarging 
the powers of the Board of State Harbor Commissioners by permitting 
it to supervi.se, regulate and control the receiving, handling, custody, 
and delivery of merchandise on the wharves and piers of San Fran- 
cisco Harbor and on the property within its jurisdiction, to license 
and require bonds of ships' agents, and to do all things necessary for 
the direct operation of San Francisco Harbor facilities by the State 
of California. 

The Port of San Francisco is one of the few ports in the United 
States that provides facilities only and that does not provide services 



60 



STATE PAPERS AND PUBLIC ADDRESSES 



necessary in connection with cargo movement. Shippers located long 
distances from ports require certain services in connection with their 
shipments and, because of the fact that they are not present to arrange 
for them with various agencies, require that they be performed by one 
authority with complete control and responsibility. That authority, 
of course, must be the harbor aiithority. It has become increasingly 
important that all harbors perform these services in order that cargo 
handling may be more efficient and economical. If the Port of San 
Francisco is to be placed on a comparable basis with other ports, it 
must be in a position to perform these terminal services. 

There is nothing new or radical in this proposal. Terminal serv- 
ices of this character are performed in various degrees by most of the 
ports of the world. Oakland, under its city charter, is permitted to 
and does perform terminal operations. The harbor of Long Beach, 
also under municipal control, has the privilege of doing all the things 
asked for in these amendments. Seattle, Portland, New Orleans, Cam- 
den, Houston and Galveston, and other important ports ai-e permitted 
to and do perform such terminal operations. 

In 1922 the Philippine Legislature passed an act conferring similar 
authority in the Manila Harbor Board. Manila soon became the most 
efficient and economical port in the Orient and is recognized as one of 
the most efficient in the world. 

If the Port of San Francisco is to hold its position among the ports 
of the nation, it must be able to provide complete services. Necessary 
functions in the handling of cargo must be concentrated in order that 
duplication of effort may be eliminated. 

It should also be borne in mind that the revenues of the Port of 
San Francisco have decreased recently because of the withdrawal of 
ferrj^ services, the falling off in water-borne commerce generally 
throughout the country, and are seriously reduced by recurring strikes 
and lockouts which the services authorized hy this proposal would help 
to restore. 

STATEMENT REGARDING FIRE MARSHAL 

A survey has shown that appalling fire hazards exist in the State 
institutions due to over-crowding, inadequate buildings and equip- 
ment, and lack of trained fire protection personnel. Experience has 
shown that institutional fires almost always result in the death of a 
high percentage of inmates. A fire of major proportions in one of our 
State institutions would result in a tremendous loss of life and the 
destruction of millions of dollars in State property. The whole subject 
of the correction of these conditions should be taken up by the Legisla- 
ture as soon as possible. I believe that it is imperative that legislation 
be enacted at once to furnish trained persons at each institution to 
supervise fire prevention and fire fighting in order to minimize the 
danger. At present this important duty is left to nurses, janitors and 
others inexperienced in fire problems. I have, therefore, asked you to 
consider the subject of the furnishing by the State Fire Marsiial of 
fire prevention and protection service at the State institutions and pro- 
viding an appropriation therefor. 

I have also asked you to consider the subject of providing an ade- 
quate salary for the State Fire Marshal. The present law provides that 
he shall serve without compensation. Until recently, the State Fire 



MESSAGES TO THE LEGISLATURE— 1 94O 



61 



Marshal was paid adequately by the fire insurance companies. This 
practice has been discontinued. 

The office of State Fire Marshal, entailing as it does the enforce- 
ment of the fire prevention laws relating to some 900 theatres, some 
6,000 cleaning and pressing shops and countless other establishments 
and institutions in addition to the supervision of fire prevention and 
safety education, requires the full time of the person holding the ofiSce 
of State Fire Marshal. 

A public official should not be dependent upon either private 
corporations or individuals for compensation for services rendered to 
the State; in fact, it sliould be unlawful for an official to receive com- 
pensation from private sources for his services. In order to secure the 
proper administration of the laws, provision should be made for a 
salary commensurate Avith the duties of the State Fire Marshal. 

AMENDMENTS TO VEHICLE CODE 

The Department of Motor Vehicles is faced with the necessity of 
making many adjustments in order that it may operate more efficiently 
and economically. In this connection, a legislative program has been 
prepared which, it is believed, will enable the department to operate 
within its budget for the first time in several years. I recommend its 
adoption. 

SALARY READJUSTMENTS 

At the regular session of the Legislature in 1939 there was elimi- 
nated from the budget bill for the present biennium the estimated 
necessary moneys for the salary and wage adjustments prescribed in 
the State Civil Service Act, for employees in State departments sup- 
ported from the General Fund. It has been impossible to make these 
adjustments from other moneys appropriated, with the result that dur- 
ing the last six months only those employees in State departments 
supported from special funds have received the adjustments to which 
under the law all are entitled, provided their merit rating is sufficiently 
high. "With about one half of the employees receiving the adjustments 
and the other half not, a situation has been created which is most con- 
fusing and demoralizing, and should be remedied with an appropria- 
tion to eliminate these inequalities. 

Considerable time and effort has been devoted in stabilizing and 
equalizing State salary and wage ranges and in making provisions for 
normal advancement within those ranges on the basis of merit, and 
certainly if this principal is to be preserved, provision should be made 
to that end by an appropriation to take care of the employees in depart- 
ments supported from the General Fund. 

I recommend that this be done if sufficient additional revenues are 
provided therefor by measures passed by you at this special session. 

PROPOSAL FOR STATE TO DRILL OIL AND GAS WELLS ON STATE LANDS 

I am also submitting a measure empowering the State, through 
the State Lands Commission, to drill for oil and gas in State lands 
subject to certain safeguards and conditions. 

The immediate problem prompting the inclusion of this subject 
in the call has grown out of a situation at and in the vicinity of Rio 



62 



STATE PAPERS AND PUBLIC ADDRESSES 



Vista, California. A little more than two years ago drj' gas -was dis- 
covered in that locality. 

Through this field runs the Sacramento River, the bed of which is 
owned by the State of California. "While the limits of the field are 
not now definitely known, it is estimated that the State may control 
as much as 15 per cent of the field. 

The State, through the State Lands Commission, has power now to 
lease such lands for oil and gas production and. in certain circum- 
stances, may enter into compensatory agreements. Both of these 
methods involve a substantial payment of the proceeds to the particu- 
lar lessee operator. Whereas, were the State to drill its own wells in 
proven areas such as the Rio Vista gas field, the cost of drilling the well 
or wells would be negligible and the risk definitolv minimized. I am 
informed that a gas well in this field may be drilled for as little as 
$45,000. Were the State to enter into a lease or leases at the prevail- 
ing royalty in the field of 12^ per cent, the State's return would 
approximate $500,000. On the other hand, were the State to drill its 
own wells, its gross return could amount to as much as $4,000,000, 
from which the cost of drilling and small operating costs would need 
to be deducted. On this estimate alone there appears to be a difference 
of $3,500,000, less, of course, drilling and operating costs. 

OTHER SUBJECTS 

There are included in the proclamation a number of items to 
allow you to consider ratification of charter amendments, validation 
of bonds, legislative printing, submission of proposed constitutional 
amendments, technical amendments of acts recently enacted, and a 
few like items such as the one to consider a soil conservation act which 
was passed at the 1938 special session, but which was held by the 
Attorney General to be of doubtful constitutionality because passed 
under a supplement to the proclamation calling the special session. 

There are also a number of items to allow you to consider other 
measures which will substantially affect the welfare of large groups of 
people or subdivisions of the State. I have been assured that they are 
extremely urgent measures and of such well-recognized merit as will 
not unduly extend this session. Needless to say, the items included are 
but a small percentage of those urged for inclusion. I have been 
forced to refuse a large number of requests from sincere people, includ- 
ing members of the Legislature, that additional items be included. 
These must await the regular session of the Legislature. 

CONCLUSION 

I realize the hardship which a prolonged special session would 
impose on individual members, attributive to the fact that their com- 
pensation at the rate of $100 a month is insufficient to meet their 
expenses and that their legislative work takes them from their u.sual 
employments upon which they rely for their personal and family needs. 

In preparing the agenda I have had this in mind and it is far from 
my purpose to compel a prolonged session. In fact, it was far from 
my purpose to compel any special session at this time. As already 
stated, this session is called in accordance with your own plans at the 
adjournment of the regular session last year. 



MESSAGES TO THE LEGISLATURE— 1 94O 



63 



Because new revenue to meet j^our appropriations was not pro- 
vided and the appropriation made for unemployment relief was made 
to cover only the period now expired,, these are the major subjects 
contained in the official call, and you will obsen^e upon careful analysis 
that there are not more than five other subjects that should occupy your 
time for any considerable period in determining: your action thereon. 
As already indicated the remaining 57 subjects refer for the most 
part to routine and urgently needed technical amendments, charter 
ratifications, etc., which would not require any prolonged session. 

Many other matters for important legislation should receive your 
attention, but are not included in the call because of my purpose to 
limit the agenda to matters of emergency and utmost need for imme- 
diate action. 

This situation emphasizes the need for a change in the constitution 
of our legislative branch of the government so as to provide not only 
for adequate compensation to members sufficient to command their 
entire time, but also to provide for a one-house body which will meet 
every year for as long as it is necessary to act upon legislation requiring 
statutory changes, and constructive measures for the progress and wel- 
fare of the people of the State. 

Kespectfully submitted. 

CULBERT L. OLSON 

Governor of California 



FIFTV-THIRD LEGISLATURE 
SECOND EXTRAORDINARY SESSION 

Convened May 13, 1940 



MESSAGE UPON CONVENING 



State op California, Governor's Office 

Sacramento, May 13, 1940 

To the Senate and Assembly of the State Legislature 
of California 

Greetings: Events occurring since the issuance by me of the proc- 
lamation calling a special session of the Ijegislatnre on January 29th 
last, have produced conditions requiring another special session of the 
Legislature for the enactment of urgency legislation to meet conditions 
caused by those events. I, therefore, issued a proclamation calling for 
another special session fixing the time for its convening at ten o'clock 
a.m. on Monday, May 13, 1940. The subjects specifically submitted in 
this proclamation are the following : 

First: To consider and act upon legislation making an addi- 
tional appropriation to the Reclamation Board for construction, 
land, rights of way, easements, and general administrative opera- 
tions and overhead, in augmentation of the appropriation made by 
Item 206 of the Budget Act of 1939. 

An additional appropriation of $1,900,000 is required for this pur- 
pose. 

Briefly, the reasons for and conditions justifying this additional 
appropriation are as follows: 

The extraordinary floods of the Sacramento River and its tribu- 
taries occurring in ]\Iarch and April of this year have done great 
damage to the river levees and other works of the Sacramento River 
Flood Control Project. These damages must be repaired before another 
flood season, in order to avert even worse and irreparable damages. 

The Sacramento River Flood Control Project is a plan, now being 
prosecuted by the Federal and State governments and local interests, 
for the protection of the Sacramento Valley from the floods of the Sac- 
ramento River and its tributaries. The plan has as its coordinated 
purposes : First, flood control, making po.ssible the maintenance of river 
levees and the forming of self-scouring river channels; second, the 
scouring out of mining debris which has accumulated in the river chan- 
nels; and third, the restoration and maintenance of navigation. 

The project has been under construction under the present plan 
since 1928. In your regular session of 1939 you appropriated $1,211,- 
570 for the State's share of the 1939-41 program thereunder. Because 
of the extraordinary floods referred to, the public welfare in the prepa- 
ration for future flood seasons requires immediate enlargement of the 
1939-41 program under this project. 

Levee breaks in the recent floods occurred in levee sections not as 
yet constructed to standard specifications. The breaks occurring in 
these floods resulted in the inundation and consequent severe damage to 
some 350,000 acres of reclaimed land. Great difficulty was experienced 
in preventing further breaks and overtopping of levees that were not 
up to standard. This condition requires the completion of all pro- 

[67] 



68 



STATE PAPERS AND PUBLIC ADDRESSES 



grammed works for the 1939-41 construction season. To be effective, 
this work must be consummated before the next flood season. 

The amount of the additional appropriation of $1,900,000 which I 
recommend is based upon surveys and recommendations of the State 
Reclamation Board and the California Debris Commission. 

Attention is called to existinjr Federal renuirements which stipulate 
that the State's share of participation in this project must be trans- 
mitted to the Treasurer of the United States before contracts may be 
let by the California Debris Commission. In addition, there is required 
a thirty-day period of advertisiiifr the contracts for bids. It should also 
be noted that time is needed for the Reclamation Board staff to secure 
the necessary ri^rhts of way and borrow areas before construction can 
commence. 

The State funds appropriated by you should be made available not 
later than June 1, 1940. This would enable bids to be opened on the 
larjrest and most urprcnt items of construction on or about June 20th, 
and successful bidders probablv would start actual constnxction earlv in 
July. 

The total yardajre that should be placed in levee sections before 
next flood season is approximately 9,400.000 cubic yards on about 70 
miles of levee. 

The recent disastrous floods have eroded and weakened Sacramento 
River Flood Control Project levees to such an extent that the necessary 
funds must be made immediately available so that these protective 
works can be reconstructed and restored to standard specifications 
before the next flood season. The lives and property of over 250,000 
inhabitants in an area exeeedinjr 1,000.000 acres of highly developed 
agricultural land are exposed to a repetition of devastatinpr floods that 
miprht ajrain result in tremendous loss of life and property. 

These levees also safeguard a larpre public investment in State and 
county hitrhwavs and other public works in the counties of Butte, 
Colusa, Glenn. Sacramento, Solano, Sutter, Yolo and Yuba. 

Second: The next and related subject included in the procla- 
mation callinfr this special session is an appropriation to the Emer- 
gency Fund created by Item 212 of the Budtret Act of 1939 for 
the cost of repair and restoration of property damapred or destroyed 
by storms and floods and for work and remedial measures desi<rned 
to avert, alleviate and prevent such damage and destruction. 

The unusually hea\T rains and floods occurrinpr in the months of 
Februarv, March and early April of this A-ear were particularly disas- 
trous in most of northern California. The first and ^rreatest flood 
occurred from February 25th to March 2d, when as much as twenty 
inches of rain fell in a five-day period and the resultiufr floods were in 
many places higrher than any known record. Ten lives were lost, a 
thousand square miles of land flooded, and damagres amounting to about 
twelve million dollars occasioned. A report covering the effect of this 
flood in detail and itemizing the damage, both by location and charac- 
ter, was prepared by the Department of Public Works and submitted 
to me on March 18th. Reference is made to this report for a full 
description of this flood and the ensuing damage. 



MESSAGES TO THE LEGISLATURE— 1 940 



69 



Great distress has been occasioned by this flood emergency, and 
widespread appeals have been made for State and Federal assistance. 
The Federal Government has responded by making WPA funds avail- 
able, by disaster loans, by easing of Federal Land Bank payments, and 
in other ways. The State is expending $60,000 from the Emergency 
Fund in the closing of the more critical levee breaks, and has set aside 
an additional $250,000 from the Emergency Fund for flood damage 
restoration work. Applications for State assistance totaling about two 
million dollars have been received. 

There is ample precedent for such assistance. Following the 
storms and floods of the winter of 1937-1938, when flood damage in 
large amount occurred in most parts of California, the Legislature in 
special session in March, 1938, appropriated five million dollars for 
flood damage restoration, which sum has practically all been allocated 
and expended under close technical and financial supervision by the 
State. Following the precedent established in 1938 in extending State 
assistance, in communities damaged by floods and which are unable 
themselves to carry on the work of rehabilitation. State assistance is 
necessary and justified. 

All applications for State assistance are being investigated in the 
field by Department of Public Works engineers, and reports on many 
are completed. An estimate of the appropriation to the Emergency 
Fund necessary to meet this State obligation fairly and properly, using 
the 1938 criteria as to eligibility will be furnished me by the Depart- 
ment of Public "Works within a day or two. This will be duly trans- 
mitted to you with m}^ recommendation as to the amount of your appro- 
priation. 

Tldrd: The third item contained in this Proclamation is that 
you consider and act upon legislation to provide for the acquisi- 
tion and construction, maintenance and operation of a system of 
works for the control, storage, conservation and utilization of the 
waters of the Napa River and its tributaries. 

In the Napa "Valley a water shortage has become aciite and urgently 
calls for solution. 

The water supply for the Veterans ' Home of California, and other 
State institutions in Napa County, is inadequate. Chapter 760, Stat- 
utes of 1937, and Chapter 678, Statutes of 1939, both urgency measures, 
appropriated moneys to be expended by the Department of Finance for 
the purchase or coiistruction of a dam and water distribution system 
for the "Veterans' Home of California, and other State institutions in 
Napa County. 

By Chapter 413, Statutes of 1935, the Rector Dam Authority was 
created and given authority to investigate and determine the best 
method of impounding the waters of Rector Creek, in Rector Canyon, 
and the feasibility of erecting a dam and constructing a system for the 
distribution of the waters of Rector Creek to the public or to munici- 
palities, or to public districts, or to State institutions or agencies. It 
was given jurisdiction over a portion of Napa State Farm, from which 
the present water supply for the State institutions is taken, for use as 
a site for the construction of a proposed dam. It was also given 



70 



STATE PAPERS AND PUBLIC ADDRESSES 



authority to issue revenue bonds to the Federal Government to con- 
struct a dam and necessary distribution system. 

A survey is now beinp: made by the Department of Public Works 
for the purpose of determining the most feasible and economical loca- 
tion for a dam and reservoir, but it would appear that additional 
legislation is necessary before starting construction, whatever the 
survey may indicate to be the best means of meeting the situation. 

Under existing legislation the Rector Dam Authority can not use 
the funds appropriated to the Department of Finance for the con- 
struction of the dam. On the other hand, the Department of Finance 
has available the moneys appropriated, but it has no jurisdiction over 
the proposed Kector Dam site, which is vested in the Rector Dam 
Autliority, and could not use the site if it Avere dptei-niiued tliat it was 
the best location for the dam. The appropriations to the Department 
of Finance are also limited to the purchase or construction of a dam 
and water distribution system for the Veterans' Home of California, 
and other State institutions in Napa County. In tlie event sufficient 
water were impounded by the dam con.structed by the Department of 
Finance to leave a surplus after the supplying of the State institutions 
in Napa County, there woiild be no legal authority for distributing 
this water. 

In order to protect the State's investment of several millions of 
dollars in its institutions in Napa Valley ; to avoid the impairment of 
the health of inmates by reason of the lack of adequate water; to 
eliminate a serious fire hazard; to bring together money and lands 
heretofore made available to different agencies, and to otherwise cure 
the defects of existing legislation and to permit the acquisition of a 
sufficient water supply upon the most sound economical basis, it is 
deemed necessary that siich a measure prepared under the direction 
of the Director of Finance and Director of Public Works will be duly 
submitted for your consideration. The need and urgency for such 
further legislation is attested by the previous enactments which have 
been cited. 

Fottrth: The fourth subject submitted in this Proclamation 
for your consideration is the making of an appropriation to the 
Department of Natural Resources for fire .suppression and pre- 
vention. 

Adequate fire protection for our forests and watersheds is also 
related to the flood control program ; but, independent of the aid which 
adequate fire protection of our forests would be to flood control, the 
need for additional funds for fire suppression and prevention is so 
vital and immediate that your action in responding to it is a very 
urgent necessity. 

A state-wide Fire Control Plan has been adopted by the present 
State Board of Forestry, as a result of a careful study of the actual 
fire situations which have occurred in California during the past ten 
years. The technicians and forest rangers of the Division of Forestry 
have assisted in the preparation of this plan; and in its adoption the 
Forestry Division has also had the advice and cooperation of the United 
States Forestry Service. 



MESSAGES TO THE LEGISLATURE— 1 94O 



71 



In view of the approaching fire season the total special appropria- 
tion requested for the period from May 15, 1940, to June 30, 1948, 
is $883,600, which appropriation I hereby recommend. 

These additional funds are required because they will result in a 
future saving of fire control money, as well as of taxable wealth, many 
times greater than the proposed expenditure. 

These additional funds are also necessary to compensate for the 
lack of protection which has resulted from the withdrawal of the 
Civilian Conservation Corps from first line fire protection. 

The members of the Legislature have been furnished detailed 
information in support of this recommended appropriation and the 
urgency thereof, including the following information : 

During the calendar year of 1939 the State Division of Forestry 
suppressed 6,864 fires burning in timber, watershed, range and grain 
areas and incidental structures. 

These fires burned over more than half a million acres of State pro- 
tected land. The losses sustained are not to be calculated merely for 
our generation, for there were losses not only of homes, live stock, prop- 
erty, range, grain and timber, but in addition we have the huge and 
incalculable loss of fertile soil washed from the watersheds by millions 
of tons into the streams and rivers and into the sea. These are the most 
serious damages of all, and they will not, and can not, be replaced within 
many generations, if ever. 

The fires of the last season and of previous ones are a contributing 
cause of the floods of the current spring season. This is established 
beyond all question of doubt. Without better fire suppression and pre- 
vention of the annual loss of protective forest cover, future flood crests 
will rise to unprecedented heights. Future rains will erode the exposed 
soil of mountain and foothill slopes, bringing ruin not only to these 
lands but to the valley farms and communities below. 

During 1939 there were 6,864 of these fires. During 1940, with the 
best of luck. Division of Forestry will suppress not less than 4,000 fires. 

Yet the budget of the Division of Forestry has never been adequate 
to meet these normal and known conditions. Each year huge emergency 
and deficiency appropriations have been made when the emergency was 
upon us ; they were necessary and compelled by calamity. 

The cheapest and mo.st efficient way to suppress fires is before they 
occur, or, in any event, at their inception, and the additional appro- 
priation shoifld be considered as an economy measure. 

Fifth: The last item or subject submitted in this Proclamation 
for your consideration is the rescission of the action of the present 
Legislature in adopting Senate Constitutional Amendment No. 9, 
Resolutions Chapter 119 of the Statutes of 1939, which would auto- 
matically be submitted to the voters at the general election of this 
year. 

My reasons for submitting this subject and recommending, which 
I do, the rescission of your adoption of this proposed constitutional 
amendment are two-fold. 

First : It is the only way open for me to go on record in the jour- 
nals of your proceedings against the adoption of this amendment ; and 



72 



STATE PAPERS AND PUBLIC ADDRESSES 



Second : Mj^ belief tbat the far-reaching, injurious consequences of 
this amendment, if adopted, may not have been o^iven tlie consideration 
due the subject when the resolution was passed. 

This proposed amendment would allow for unlimited encroach- 
ment on the executive branch of the government by the judicial branch, 
contrary to the basic conception of the independent functions of the 
three branches of government under the American constitutional sys- 
tem. It would place in the courts a responsibility to determine purely 
administrative acts. 

Every order or determination of any administrative officer, board 
or commission in the performance of their duties under the Constitu- 
tion and in the administration of the acts of the Legislature, would be 
subject to review, trial de novo, revision or revocation upon appeal 
therefrom to a judge of a superior court, regardless of the fact that the 
order or determination is purely an administrative act under all stand- 
ards and precedents established throughout the history of our consti- 
tutional system. 

It would enable any private interest to obstruct the execution of 
acts of the Legislature, by compelling administrative orders made under 
them to run the gamut of judicial procedure until a court of last resort, 
after long delays, shall tell the administrative officer or commission 
whether and how the law may be enforced. 

The effect would be a circumvention of the execution of laws and a 
promotion of governmental inefficiency. 

I can not too strongly urge your reconsideration of this resolution, 
with the hope that you will rescind it. 

This special session is called for an hour immediately prior to the 
resumption of the special session previously called, in expectation that 
you may delay resumption of the previously called special session to 
act or initiate action upon these urgency matters before resuming that 
session. 

Respectfully yours, 



CULBERT L. OLSON 
Governor of California 



FIFTY-THIRD LEGISLATURE 
THIRD EXTRAORDINARY SESSION 

Convened September 13, 1940 



MESSAGE UPON CONVENING 



State of California, Governor's Office 

Sacramento, September 13, 1940 

To the Members of the Senate and Assembly of the California 
Legislature, Sacramento, California 

Greetings : You have been called into special session on this date 
for purposes set out in a communication which I addressed to each of 
you when issuing the proclamation. Briefly, they are these: 

(1) To provide further for unemployment relief. 

(2) To create and provide for a State Council of Defense. 

In the matter of Unemployment Relief, the State Relief Admin- 
istrator reports to me that an immediate appropriation of at least 
$1,450,000 is necessary to carry the present unemployment relief case- 
load from September 11th to September 30th, both dates inclusive, or 
all unemployment relief payments must be discontinued during that 
period. 

To meet unemployment relief payments from September lltli 
through September 14th it was necessary for the Director of Finance, 
with my approval, to authorize incurrence of a deficiency of $300,000 
for that purpose. This amount is the maximum deficiency allowable 
according to the Attorney General's opinion, numbered NS 2082-A 
rendered to the State Controller December 11, 1939. 

I was informally advised that the President Pro Tempore of the 
Senate and the Speaker of the Assembly intended to reconvene the 
Legislature on September 21st for the purpose herein contemplated. 
I would have preferred this procedure, and would, if possible, have 
avoided calling you into special session before then. 

I understand that your Joint Committee on Unemployment Relief, 
in fixing September 21st as the date for reconvening, was under the 
impression that a larger deficiency could be authorized by the Director 
of Finance and the Governor; an impression caused by the following 
communication dated September 7th, from Director of Finance John R. 
Richards to Relief Administrator S. G. Rnbinow, which was called to 
the attention of the Committee by ]\Ir. RubiiioAV: 

"Because of prior commitments, it will not be possible to finance 
unemployment relief out of the Emergency Fund from September 11th 
to September 21st as recommended by the Legislative Fact Finding 
Committee on relief. Resolution of committee should be to the effect 
that Director and Governor authorize relief administration to create 
a deficiency to be paid from any appropriations to be made by subse- 
quent legislative action. With such a resolution of the committee, you 
could be authorized to use present cash on hand already committed for 
other expenditures to continue relief payments until Ijcgislature meets 
and takes necessary action on September 21st and their action is 
enacted into law." 



[75] 



76 



STATE PAPERS AND PUBLIC ADDRESSES 



Since your Joint Committee is familiar with the present and pros- 
pective relief load under the terms of present law, Chapter 45 of the 
First Extraordinary session, and the present need for action, on your 
part, to release or appropriate additional funds for immediate use, 
doubtless, the full advice and recommendation of your Joint Com- 
mittee will be immediately available, so that you may readily act upon 
this emergency, perhaps within one day. 

In the matter of a State Council of Defense, every consideration 
of national and local defense warrants your prompt and vigorous action. 
I have heretofore appointed a State Council of Defense and the Execu- 
tive Committee thereof. They have been at work since last June 24th 
with the fornmlation of plans and program for State and home defense 
and for civil defense activities, in accordance with advice and instruc- 
tions received from the Council of National Defense and its advisory 
committee and with the aid aid and cooperation of a representative of 
the War Department. 

In order to carry on this work, the council should be established 
and its support funds should be provided through legislative act. 

A bill will be presented for these purposes. It will provide for 
the establishment and organization of this Council of Defense in the 
executive department of the State government in accordance with the 
plans of the Council of National Defense and its advisory commission 
and other agencies of the Federal Government, with power to plan for 
the mobilization of agricultural, industrial, communication and trans- 
portation facilities, for the preservation of the public peace, health, 
safety, and welfare, for the protection of individual rights and con- 
sumer interests, for the suppression of sabotage and subversive activi- 
ties, to cooperate with similar agencies authorized to be established in 
the cities and counties, to formulate a program of State and local 
government participation in the National Defense program, to gather 
and disseminate information in regard to such participation, to inte- 
grate State and local programs with the national program, to make 
adjustments necessary for the prompt assimilation and unification of 
such programs, and to coordinate properly governmental and private 
agencies in the defense effort. This bill will provide for participation 
in the work of the California State Council of Defense by members of 
the Legislature. And it will appropriate money to the State Planning 
Board and to the California State Council of Defense for these purposes. 

I am sure that we all desire complete unity in matters of home 
and national defen.se; and I am sure that we will all agree that the 
legislative and the executive departments should cooperate and unite 
in the work of perfecting and carrying forward all defen.se plans and 
programs within our State. I recommend that the proposed act pro- 
vide for a committee of the Legislature consisting of members of the 
Senate and Assembly who shall be authorized to meet and participate 
with the State Council of Defense and its executive committee, to advise 
and cooperate in the work of the council, and to recommend such legis- 
lation as may be found necessary to the accomplishment and success 
of the important work which it will be the duty of the State Council 
of Defense to conduct. I do not believe that any larger appropriation 
than $50,000 is necessary at this time and I would recommend that 
amount. 



MESSAGES TO THE LEGISLATURE— 1 94O 



77 



I ask for and anticipate your cooperation, your prompt and favor- 
able action in the matters here presented. 

Since issuing: the proclamation for this session I have been urged 
to include other matters related to national defense. One is a proposal 
to permit more intensive use of public school occupational training 
facilities to train artisans and mechanics. Another is a proposal to set 
up a sabotage and arson bureau within the State Fire INIarshal's office. 

It is now my understanding that your previous call to reconvene 
ou the twenty-first can not be rescinded and that you will therefore 
meet then regardless of this present call. This being the ease, I shall 
seek to discuss these proposals with your leaders. Should it appear to 
be your wish, and should they appear to be likely of passage, I shall 
be glad to issue a call to include these items. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 



FIFTY-THIRD LEGISLATURE 
FOURTH EXTRAORDINARY SESSION 

Convened September 21, 1940 



MESSAGE UPON CONVENING 



State of California, Governor's Office 

Sacramento, September 21, 1940 

To the Members of the Senate and Assembh/ of the California 
Legislature, Sacramento, California 

Greetings: Yon have been called into this special session on this 
date for purposes disclosed in the proclamation therefor, a copy of 
which is attached hereto. Briefly, these purposes are : 

(1) Creation and support of a State Council of Defense. 

(2) Enablinp^ local housin<r authorities to undertake projects to 
house defense industry workers. 

(3) Permitting; certain schools to remain open on Saturdays, Sun- 
days and holidays to permit their more intense use for train- 
ings artisans and mechanics. 

(4) Permittin*; civil service leaves of absence to State employees 
entering the military service. 

(5) Permittmfr State employees in military service to maintain 
their State Retirement System benefits. 

(6) Permittinj; the creation of an Arson and Sabotagse Bureau in 
the Division of Fire Safety. 

(7) Permitting: the abolishment of the Communist Party. 

(8) Permitting: the removal of certain restrictions upon the use 
and operation of the recently acquired Carquinez Bridge. 

(9) Appropriating funds for the reconstruction of school build- 
ings destroyed by earthquake. 

In early August, the Council of National Defense of the Govern- 
ment of the United States addressed a memorandum to the governors 
of the forty-eight States, requesting the creation of State Councils of 
Defense ' ' to provide means for full utilization of the powers and admin- 
istrative organizations of Federal, State and local governments and for 
adjusting and coordinating programs and procedures in order that 
closely integrated administrative machinery may function with the 
maximum speed and effectiveness," and to utilize the knowledge, skill- 
and organizational facilities of private agencies in assisting the exist- 
ing public administrative agencies in a coordinating national defense 
program. 

It was recommended that these councils be advisory to the Gov- 
ernors of the forty-eight States, who as Commanders in Chief of the 
armed forces and Chief Executives of the civil establishments were 
considered to be the only State officials in a position to secure executive 
action throughout the entire administrative structures. The functions 
of such State Councils of Defense as outlined by the memorandum 
from the Federal Government are "to advise the Governor on problems 
arising with respect to the (1) integration of governmental programs 
for defense; (2) adjustments or arrangements necessary for prompt 

[8i ] 



82 



STATE PAPERS AND PUBLIC ADDRESSES 



assimilation of such programs by the administrative establishment; 
(3) proper coordination between the activities of government and pri- 
vate agencies cooperating in the defense elYort. " 

Upon receipt of this memorandum I requested the organizing com- 
mittee of an Advisory Council which I had appointed in June to recom- 
mend a proper defense organization for California, in accordance with 
a detailed plan suggested by the Federal Government in its memor- 
andum, and to also recommend on a purely nonpartisan basis chairmen 
and vice chairmen for each of the six functional committees suggested 
by the memorandum, so that the organized membership of all of the 
important elements participating in a defense program would be rep- 
resented. All of the prominent citizens recommended by this com- 
mittee have accepted appointment and with the representative of the 
California League of Cities, the Chairman of the State Planning Board 
and myself constitute the working Executive Committee of the present 
California State Council of Defense. These gentlemen are: 

Industrial Resources and Production Advisory Committee. 

James Mussatti, General Manager, State Chamber of Commerce. 

Human Eesources and Skills Advisory Committee. 

Gordon S. Watkiiis, Dean, University of California at Los Angeles. 
C. J. Ilaggerty, President, State Federation of Labor. 
Harry Sec, State Eepresentative, Railroad Brotherhoods. 

Housing, "Works and Facilities Advisory Committee. 

Baldwin M. "Woods, Regional Director, National Resources Plan- 
ning Board. 

John Riffe, State Director, Steel "Workers Organization Committee. 
E. F. Scattergood, Los Angeles Department of Water and Power. 

Health, Welfare and Consumer Interest Advisory Committee. 

Archibald Young, President, California Council of Social Work. 
Richard Neustadt, Regional Director, Social Security Administra- 
tion. 

Civil Protection Committee. 

Earl Warren, Attorney General. 

R. E. Jlittelstaedt, Adjutant General. 

Agricultural Resources and Production Advisory Committee. 
C. M. Brown, Jr., Agriculturist. 
Jesse W. Tapp, Vice President, Bank of America. 
Samuel C. May, of the State Planning Board. 

Richard Graves, Executive Secretary, League of California Cities. 

This Executive Committee caused to be prepared and the members 
present at a meeting on September 13th unanimously approved and 
requested me to present to you a bill which would give legislative sanc- 
tion to the existing organizations and provide necessary funds to per- 
form the tasks already requested by the Army, Navy and other Federal 
agencies, including the National Council of Defense. 

Because of the con.stitutional prohibition in California again.st par- 
ticipation in executive or administrative work by legislators, it was 
necessary to provide specifically that representation of both houses be 



MESSAGES TO THE LEGISLATURE— 1 940- 



83 



secured through a joint committee empowered to serve on the council 
to the extent not incompatible with their status as legislators. 

A separate appropriation measure granting $50,000 to the State 
Planning Board and the Council of Defense has also been proposed in 
order to secure means for implementing defense activities within the 
State, pending the effective date of the proposed legislation creating 
the State Council of Defense. 

I feel confident that the members of this Legislature will give the 
most earnest consideration to the establishing and financing of efficient 
machinery necessary for cooperating with the Federal defense pro- 
gram, as suggested by the National Defense Council and recommended 
by the representative citizens who constitute the Executive Committees 
of the existing State Council of Defense. 

The proposal to enable housing authorities to undertake low-cost 
housing projects in locations convenient for their use by workers 
engaged in war industry, bears the hearty approval of many citizens. 
It is pointed out that the need for siich housing projects is secondary 
onl}^ to that of the industries themselves. 

Present law prohibits the Saturday and Sunday use of the many 
high schools throughout the State having machine shops and other 
equipment for the training of sheet metal workers, pattern workers, 
molders, machinists, and other artisans and mechanics of whom there 
now develops such an acute shortage in the war industry. The present 
emergency suggests the removal of this restriction in order that a more 
intensive use might be made of these training facilities. 

The two proposals affecting State employees in the military service 
are requested by Adjutant General R. E. Mittelstaedt. They surely 
need no justification. Their merit is patent. 

The proposal regarding anti-American or treasonable political 
parties is self-explanatory. 

The request for an Arson and Sabotage Bureau in the Division of 
Fire Safety is supported in and throughout every quarter of Cali- 
fornia 's industry ; especially those whose products make them the 
target of the enemies of our government and our government's defense 
ef¥orts. No additional funds are requested in this connection. 

The Toll Bridge Authority Amendments are correctives found 
desirable since the purchase of the Carquinez and Antioch Bridges. 
Present law prohibits the use of a Toll Bridge Authority Bridge by 
pedestrians, and also requires the Toll Bridge Authority to maintain 
24-hour tow-car service on its bridges. Both of these provisions are 
quite proper in their application to the San Francisco-Oakland Bay 
Bridge because of its location, its long approaches, and its great length. 
But the Carquinez Bridge is much used bj' pedestrians, most of whom 
live and work in the vicinity of the bridge. Since there appears to 
be no sound reason for prohibiting .such pedestrian use of the Carquinez 
Bridge, the amendment here contemplated has been suggested. 

Since the Carquinez Bridge is relatively short (4,482 feet including 
its approaches), and since privately conducted tow-car services are 
maintained and available nearby, and since the need for such service 
seems very little, it is thought that the cost to the State of maintaining 
such a service would be an unnecessary and unwarranted expense ; all 
of which suggests the amendment here contemplated. 



84 



STATE PAPERS AND PUBLIC ADDRESSES 



The proposal to appropriate for the reconstruction of earthquake 
damage to schools is included in the request of Doctor Walter F. Dexter, 
Superintendent of Public Instruction and Director of Education, who 
urges it as an emergency measure. 

KespectfuUy submitted. 

CULBERT L. OLSON 

Governor of California 



State of California, Governor 's Office 

Sacramento, September 21, 1940 

To the Mrmhers of the Senate and Axsembly of the California 
Lrgislatnre, Sacramento, California 

Greetings: Item No. 10 was included in the call on this date for 
the fourth extraordinary session of the California State Legislature 
for the following reasons: 

At the second extraordinary session of the Legislature held in 
May, 1940, the Legislature passed an emergency measure appropriation 
of .$500,000 to assist in the repair of flood damages. It was designed to 
assi.st communities in recovering from the disastrous floods of the winter 
of 1940. I considered this a meritorious purpose and signed this bill 
and it became Chapter I of the Statues of 1940, Second Session. 

It later developed that Chapter I contained provisions which made 
it extremely difficult of operation and, to many deserving communities, 
of no assistance whatever. Legal opinions interpretintr this law have 
been obtained from the Attornej' General, but the legal obstacles have 
been so great that it has not been possible to allot any of the funds 
appropriated by Chapter I. 

The purpose of including this item in the call of the fourth extraor- 
dinary sessio)! is to allow the amendment of Chapter I to permit its 
operation as contemplated when it was enacted. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 



FIFTY-THIRD LEGISLATURE 
FIFTH EXTRAORDINARY SESSION 

Convened December 2, 1940 



MESSAGE UPON CONVENING 



State op California, Governor's Office 

Sacramento, December 2, 1940 

To the Honorable Members of the Senate and Assembly 
of the State of California 

Greetings : It is proper upon the convening of this extraordinary 
session of the Legislature that I should briefly explain to you the sub- 
jects which I have placed before you for consideration and the reasons 
for their inclusion in the proclamation calling the session. Before 
doing so, I may state that the contents of the message which I sent 
to you this morning when you were sitting in your fourth extraordinary 
session, which message was concerned with the necessity of taking 
action on various subjects prior to the next regular session, are appli- 
cable to the subjects of this new session. 

The first item concerns clarification of the experience rating pro- 
visions of the Unemployment Insurance Act. "Experience Rating" 
is that provision of the act which, on the basis of favorable employ- 
ment experience, grants a lower contribution rate to those employers 
whose experience indicates that a lower rate will be more nearly com- 
mensurate with benefit payments to their employees. This provision 
has been in our law in substantially its present form since the law's 
inception in 1935, and similar provisions will be found in the laws 
of many other States. 

Under our present law the California Employment Commission 
is required, as of January 1, 1941, to classify employers with regard 
to their experience and to levy tax assessments at a rate lower than 
the general rate of 2.7 per cent if any employer has the required 
reserve in his bookkeeping account with the Commission. The amend- 
ments will also assure employers of receiving the additional tax credit 
off.set allowed under applicable sections of the Federal International 
Revenue Code. 

Proper amendment at this time will cure apparent defects and 
clarify the law so as to provide the Commission with the necessary 
machinery and with definite legislative instructions as to how the exist- 
ing experience rating provisions are to be administered on January 1, 
1941. 

In considering this matter it should be understood that experience 
rating in unemployment insurance systems is in an experimental stage. 
There are many who contend that it has no place in the law. I, per- 
sonally, and the Commission as well, have some doubts as to the sound- 
ness of the entire "experience rating" principle. After having had 
an opportunity to observe actual experience in the administration of 
the provision, a recommendation may well be made in the future that 
these provisions be eliminated entirely. However, at the present time 
it seems essential that these amendments should be adopted in order 
that the Commission may proceed with the proper administration of 
the present law in accordance with its expressed legislative intent. 



[87] 



88 



STATE PAPERS AND PUBLIC ADDRESSES 



Several months ago it became necessary to make arrangements for 
the purchase of additional land near the San Luis Obispo Campsite of 
the National Guard to provide for the leasing to the Federal Govern- 
ment of the necessary area on -which the Federal Government was to 
construct $5,000,000 of barracks, storehouses and other facilities in 
connection with the training of the Guard. The improvements on the 
land will belong to the State when the present emergency is ended. 
At that time it was thought that it would be necessary to call a special 
session in order to get the necessary funds. But conferences with a 
number of the members of the Legislature ended in a plan whereby 
part of the necessary funds were provided from the Emergency Fund 
with the understanding that legislation should be passed at the next 
special session to provide funds necessary to complete the purchase and 
to reimburse the emergency fund. A $50,000 appropriation from the 
General Fund is needed to complete the purchase, and the sum of 
$190,000 is needed to reimburse the Emergency Fund, which sum may 
be obtained by transferring $110,000 of unneeded moneys from tlie 
support appropriations for the National Guard and appropriating 
$80,000 from the General Fund. Thus a total new appropriation of 
only $130,000 is needed. 

Item No. 3 in the proclamation concerns legislation to enable the 
State to establish a State Guard, as authorized by Federal Law, in addi- 
tion to the National Guard. The explanation of such legislation and 
the necessity therefor is contained in the attached copy of a letter 
from The Adjutant General. 

Item No. 4 will permit the enactment of legislation to allow the 
City of San Francisco to lease portions of Treasure Island to the 
Federal Government or to the State for defense purposes. Repre- 
sentatives of the City of San Francisco have requested this legislation 
as the Navy Department has already requested the use of part of the 
island. 

Item No. 5 was included in response to the request of a large 
number of members of the Legislature. I understand that one of the 
large life insurance companies has under consideration plans to invest 
some ten million dollars in a much needed moderate cost housing proj- 
ect, but that the insurance laws do not permit the investment of funds 
of insurance companies in real estate, except for their necessary office 
buildings. The reasons urged for this legislation are the defense 
housing needs and the unemployment in the building trades and allied 
industries. It would seem that an amendment of the law to permit an 
investment in a large moderate cost housing project would be proper 
because of such conditions, provided adequate standards and super- 
vision be set up for the making of such investment. Such legislation 
should provide that the insurance companies investing in such projects 
must waive the right to set off against the amounts due from them for 
gross premium taxes, the amounts of the real estate taxes on such 
projects. 

The next item, concerning a wind tunnel, simply will permit pro- 
posed legislation to allow the maintenance of a wind tunnel on the 
Campus of San Diego State College for the study of problems relating 
to aircraft. I understand that Federal or private funds will com- 
pletely provide for the erection and maintenance of the proposed wind 



MESSAGES TO THE LEGISLATURE— 1 94O 



89 



tunnel, and that this will furnish testing equipment essential in the 
National Defense program, and which will also be valuable as equip- 
ment used in the educational program of the college. 

The seventh item is necessary for legislation to permit the counties 
of Solano or Contra Costa or the cities of Benicia or Martinez, or 
either of them, to operate the Martinez-Benicia ferry. A committee of 
representatives of various communities interested in the ferry, which 
committee included several members of the Legislature, requested that 
this item be included. Immediate action is necessary in order to come 
within certain time limitations involved in the transfer of the Antioch 
and Carquinez bridges. 

The eighth item will authorize legislation necessary in order that 
the county of Kern may complete a transfer of certain of its real prop- 
erty to the Federal Government to be used as the site of a post office, 
in exchange for the present postoffice building, which will be used by 
the county for a public library. 

Item No. 9 is placed before you to authorize legislation which will 
permit a conveyance to be made to the Federal Government by the 
city of Santa Ba'rbara of a small plot of ground for use as a naval 
armory. The land is the result of accretions on tidelands granted 
by the State to the city of Santa Barbara for specified purposes, and 
in order to insure the validity of a grant from the city of Santa Bar- 
bara further legislation is necessary. 

The last item is required to enable the State to exchange a small 
parcel of land belonging to the State and under the jurisdiction of 
the National Guard, for another parcel of land necessary for a right- 
of-way for the construction of a railroad spur track from the right-of- 
way of the S. P. R. R. for transporting building and military supplies 
to the National Guard Training Camp at San Luis Obispo. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 

The Adjutant General 

State of California, Division op Military Affairs 

Sacramento, November 30, 1940 

Hon. Culbert L. Olson, Governor of California 
State Capitol, Sacramento, California 

My Dear Governor Olson: It is requested that immediate con- 
sideration be given to amending the Military and Veterans Code of the 
State of California to enable the organization of units to be known as 
the State Guard. This is an urgent matter and is required by reason of 
the following facts : 

a. The entire National Guard of the State of California will have 
been inducted into Federal service within a short time, whereafter it 
will not be available for local emergencies. 

b. The National Defense Act prohibits the organization of units by 
states other than the Federally recognized National Guard in time of 

7—18627 



90 



STATE PAPERS AND PUBLIC ADDRESSES 



peace. However, Congress has recently passed a law which authorizes 
the organization of a State Guard during such time as the National 
Guard of any state is in active Federal service in time of peace. 

c. The execution of this law in any state is contingent upon pas- 
sage by the state of necessary legislation where the State Military Code 
is not sufficient. 

d. The Military Code of California is insufficient in that it does 
not provide for any organization other than the Federally recognized 
National Guard. 

In view of the foregoing, it is necessary to make certain amend- 
ments to the Military Code. Several proposed revisions accomplishing 
this have already been forwarded to you. 

"Very truly yours, 



R. E. MITTELSTAEDT 
Brigadier General, The Adjutant General 



FIFTY-FOURTH LEGISLATURE 
REGULAR SESSION 

Convened January 6, 1941 



FIRST BIENNIAL MESSAGE 



State of California, Governor's Office 

Sacramento, January 6, 1941 

To the Senate and Asscmhhj of the State of California 

Section 10 of Article V of our State Constitution, which has been 
a part of our Constitution since 1849, provided that the Governor, "shall 
communicate by message to the Legislature, at every session, the condi- 
tion of the State, and recommend such matters as he shall deem 
expedient. " It is in the performance of that duty that I appear before 
you at this opening session of the Fifty-fourth California Legislature; 
also to extend my greetings and best wishes for the success of your 
legislative labors and for your personal well being; also to express my 
sincere desire that we shall engage in the performance of our respec- 
tive duties in a spirit of cooperation with constructive purpose and 
mutual respect for the dignity of our offices. 

We enter upon this year of 1941 with improved conditions in State 
finances, due to the increased activity of certain California industries, 
in which vast expenditures are being made by the Federal Government 
in carrying forward a program of National defense. This has increased 
the State's revenues under our existing revenue laws to the point of 
balancing our current month to month expenditures, and they may 
gradually reduce the accumulated deficit which a year ago, before the 
Nation entered upon a program of expenditures for National defense, 
was consistently rising to alarming proportions. 

In my budget message two years ago it was shown that existing 
revenue laws were insufficient to meet the fixed charges and budgetary 
requirements for governmental services provided for by law, even with 
the most stringent curtailment of those services and the greatest pos- 
sible economies that could be accomplished in their administration. 
And, as required by the Constitution I then recommended new meas- 
ures to produce sufficient revenue to balance the budget for the ensuing 
biennium and to reduce the deficit that had accumulated during previ- 
ous administrations. The present World War and the prospect that 
the United States would now be engaged in carrying forward a National 
defense program involving expenditures of many billions of dollars, 
with resultant stimulation of industrial and commercial activities, 
reemployment and great reduction in the State unemployment relief 
load, was then unforeseen. Had the revenue measures then recom- 
mended been adopted, it now appears that by the end of the present 
biennium the entire State deficit would have been wiped out and we 
could be looking forward to a reduction in tax revenues lightening the 
tax burden on those least able to pay. 

* * « 

Later on in your session this month, in obedience to my constitu- 
tional duty, I shall submit to you a proposed budget to meet the fixed 
charges and expenditures required by the Constitution and present laws 
during the next biennium. Looking forward to a continuance if not 

[93] 



94 



STATE PAPERS AND PUBLIC ADDRESSES 



an increase in State revenues under existing laws sufficient to meet the 
expenditures under that budget and to also reduce the remaining State 
deficit during the next biennium, I am pleased to say at this time that 
I will not be compelled in ray budget message to recommend enactment 
of any additional revenue measures at this regular session. 

« * * 

With regard to the condition and accomplishments of the adminis- 
trative departments which are under the direction of the Governor, 
I submit to you the following report, leaving it to other elected officials 
to submit to you reports on the condition of their departments. 

STATE DEPARTMENT OF FINANCE 

The Department of Finance has exercised during this biennial 
period rigid control over all expenditures, resulting in substantial sav- 
ings to the State Government. Every means available to the depart- 
ment has been utilized in accomplishing this result. 

Judicious scrutiny has been made of all requests for the purchase 
of materials, supplies, and equipment, the filling of vacant positions, 
and the creation of new positions. Through the exercise of rigid 
budgetary control, all excessive and unjustified expenditure requests of 
the several State agencies have been disallowed and the savings thus 
effected, together with those accomplished through the other activities 
of the Department of Finance, have been set aside in reserves. These 
reserves will revert to the State Treasury, except to the extent that 
they have been utilized to make salary adjustments and to meet unfore- 
seen contingencies not provided for in the original appropriation. 

In order to encourage the widest possible competition on the 
State's purchasing, agencies have been required to draw specifications 
which will not discriminate against any firm or its products. Specifica- 
tions are so prepared as to permit the fullest possible competition 
among business firms in the State. This serves to accomplish two 
purposes: (a) Extend to every business equal opportunity to bid; (b) 
Safeguard the interests of the State by obtaining quality products at 
the lowest cost. The result of such requirements has been a saving of 
thousands of dollars to the State. 

Citing one instance of the result of competitive bidding : The 1941 
contract for oil and gas netted the State a saving of $158,365, the low- 
est price ever received by the State for its oil and gas requirements. 
The following accomplishments by the Department of Finance are 
W'Orthy of mention : 

1. Reduction in the premium of surety bonds, from a high of $7.50 
per thousand to a high of $2.50 per thousand, will result in a saAdng 
of approximately $50,000 per biennium. 

2. Fewer passenger automobiles purchased, together with the 
policy of buying less expensive types. 

3. Closing of the Napa State Farm, which during the 20 years of 
its operation resulted in losses of approximately $275,000 to the State. 

4. Daily report required as to use, mileage, and purpose of trips 
of each State automobile. This has eliminated .the use of State cars 
for personal purposes. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



95 



'5. The establishment of a policy that all State passeng;er vehicles 
must be operated for at least 65,000 miles instead of 50,000 miles before 
these vehicles are turned in on the purchase of new cars. 

6. The more effective coordination achieved by the Department of 
Finance in the purchasinfr of securities for various State funds has 
prevented the numerous State ap;encies from bidding: ajrainst each 
other, and thus makes it possible for the State to obtain high yield 
bonds at the lowest possible price. 

7. All leasinjr of office and other rental space has been placed under 
the supervision of a Chief of the Division of Service and Supply, in 
order that the State may obtain adequate quarters at lowest rental 
prices. 

« * * 

The past two years have been quite the most active and successful 
in the history of the State Planning Board. 

As a result of the board's studies of tax-delinquent lands, Assembly 
Bill No. 47, the Lands Classification Bill, has been adopted and will 
become efi'ective' early this year. The importance of the problem here 
dealt with is indicated by the fact that some three and one-half million 
acres of rural lands and three hundred fifty thousand subdivision lots 
have been deeded to the State for nonpayment of taxes. 

Accurate maps are a necessity to practically all governmental 
agencies. California is today less than half covered by basic surveys, 
although more than .$10,000,000 have been spent for them by public 
agencies. As a result of studies, the Planning Board has developed a 
plan for State and Federal cooperation in providing complete state- 
wide coverage within a reasonable period of time. This plan will give 
California the most comprehensive and best coordinated mapping pro- 
gram in the country and will assure a maximum return for every 
dollar spent. 

As a result of studies by the Planning Board, California now has 
its first long term plan for the location of future State office buildings 
in Sacramento. 

The board has cooperated with the National Resources Planning 
Board in studies of governmental and voluntary regulations of the oil 
and gas industries in California. This was done in preparation of a 
nationwide study of energy resources. 

In cooperation with the State Council of Defense and at the 
request of the Army, the board conducted an intensive survey of tracts 
of land appropriate for use for Army training camps. For this, the 
board has received praise and thanks from Army officials. 

The board has issued the first survey of the activities of the various 
local and regional planning boards of California. As a result, for the 
first time, each of the thirty-three county planning commissions and 
the one hundred thirty city planning commissions, now knows what all 
of the commissions are doing. 

The board expects to continue its studies of tax-deeded lands. 

Other studies now well advanced are : 

"An airport and airway plan for California" being prepared in 
cooperation with the Civil Aeronautics Authority, a study of "Recre- 
ation in California," with the assistance of the National Park Service, 
and a "Local Planning Manual" designed to guide the work of plan- 



96 



STATE PAPERS AND PUBLIC ADDRESSES 



ning commissions in small cities. Unless emergencies interfere, all of 
these reports should be completed this year. 

The facilities of the State Planning Board are available to investi- 
gate problems and make reports which %vill contribute to an improved 
administration of State affairs. It is a tool to be used in fact-finding, 
research and broad planning. It should be given greater support and 
larger responsibilities. 

DEPARTMENT OF PUBLIC WORKS 

In the eighteen months ending last June 30, the Division of High- 
waj's expended some $55,000,000. This included $29,000,000 for con- 
struction including rights of way, betterments, minor improvements 
and engineering, $13,000,000 for maintenance and $12,000,000 for 
allocations of work within incorporated cities. 

Thirty-three major works have been completed in this eighteen 
month period or are now in course of construction. These include: 

The west's first freewaj'^, the Arroyo Seco Parkway, between Los 
Angeles and Pasadena. 

The further extension of this freeway on North Figueroa Street 
in Los Angeles. 

The Cahuenga Pass freeway from Hollywood to San Fernando 
Valley and points north. 

The 01\Tnpic Boulevard freeway, from the center of Los Angeles 
to Santa Monica. 

More adequate approaches to the Golden Gate Bridge. 

New sections of four-lined divided highways on the main San 
Joaquin Valley route. 

The Los Gatos Canyon road from Santa Cruz to Los Gatos. 

The relocation of the Pacific Highway north of Redding due to the 
construction of Shasta Dam. 

Shortening and straightening the road between Sacramento and 
San Francisco. 

Several grade separation pro.iects. 

Numerous other projects throughout the State from Del Norte 
County in the north to Imperial County in the south. 

New state-wide traffic surveys and studies have been undertaken 
with the hope of eliminating highway traffic congestion, particularly 
in metropolitan areas. The Highway Commission has pledged itself 
to convert the Bay Shore Highway from Palo Alto to San Francisco 
into a "freeway." 

« « • 

Th,e California Toll Bridge Authority has rendered signal public 
service during the past two years. 

In May, 1939, the Authority refinanced the bonded indebtedness 
against the San Francisco-Oakland Bay Bridge, thereby securing a 
reduction of interest from 4| per cent to 4 per cent. In the bargain, 
the new issue was sold at a premium netting the Bridge a profit of 
$1,065,000. 

The Authority has since by four successive steps, reduced pas- 
senger car tolls from 50^ to 25<J. Corresponding reductions have been 
made in tolls charged trucks, busses and commuters. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



97 



In September, 1940, the Authority completed purchase of the 
Carquinez and Antioeh Toll Brid<?es from the American Toll Bridg'e 
Corporation and immediately reduced passenjrer car tolls by nearly 
50 per cent. This was done without delaying: the date when the bridg:es 
would otherwise have become public property and toll free. In the 
meantime, the public will be saved upward of $4,000,000- in toll charges. 
This purchase was made by the issuance of revenue bonds purchased 
at an interest rate of only about If per cent per annum. 

Under the function of construction, repair and improvement for 
the various State departments, the Division of Architecture has, dur- 
ing the past two years, accomplished architectiiral and engineering 
work to the value of over $10,000,000. 

In addition, the division constantly renders assistance of an 
advisory nature to the various departments. 

Plans have been checked and approved for safety of design and 
construction for more than 760 school construction projects having an 
estimated construction cost in excess of $35,000,000. 

As a result of consultations with the Department of Institutions, 
the division has succeeded in standardizing all plans, fixtures and 
equipment for futvire housing facilities for the department. By this 
means the cost of such institutional hoiising has been reduced so that 
it now costs no more, and in many cases costs less, than modern housing 
built under mass construction methods. Further savings are antici- 
pated. 

The Division of Architecture has completely rearranged the plans 
for Chino Prison, making them conform with the original purposes of 
the Legislature in providing for its establishment, namely, that of a 
detention and rehabilitation home rather than a "maximiim security" 
prison ; also greatly increasing its capacity without increasing its cost. 

* •* * 

In the Division of Water Eesources an extraordinary mimber of 
surveys, investigations and studies have been made of the many prob- 
lems raised by the construction of Shasta Dam and the Central Valley 
Project. These relate both to the disposal of water conserved by the 
project and also to the electric power to be generated at Shasta Dam. 

An investigation was made and report rendered on the feasibility 
and cost of obtaining supplemental water supplies for the State insti- 
tutions and cities in Napa Valley. 

Following last year's floods in northern California, the division 
rendered a report covering the nature and extent of the floods, the 
damages resulting therefrom, and a program of rehabilitation and 
permanent remedial flood control measures. 

The Department of Public "Works has at all times sought to protect 
the market for Shasta Dam power and has appeared before the Rail- 
road Commission to oppose the various elforts on the part of public 
utilities corporations that might interfere with that market. Confer- 
ences were held in recent months with representatives of the Depart- 
ment of Interior, United States Bureau of Reclamation, and the Cali- 
fornia "Water Project Authority. Out of these conferences have come 



98 



STATE PAPERS AND PUBLIC ADDRESSES 



the first determinations of the cost of Shasta power to snch public 
ap'eneies as may wish to buy it wholesale. 

* * ■* 

I believe that it is very generally recognized that the Golden Gate 
International Exposition was a great snccess; that all Californians 
should draw great satisfaction from it; and that the State Govern- 
ment's participation therein, through the California Commission, was 
well conceived, well planned, and most capably managed. 

Most of the State's exhibits have been salvaged for continued use. 
Several of the exhibits have been or will be reconstructed at the State 
Fair or elsewhere. 

The commission has returned to the General Fund in excess of 
$250,000 in cash unexpended by it in the administration of the State's 
appropriation for the purposes of the exposition. 

DEPARTMENT OP AGRICULTURE 

The Department of Agriculture now has forty-five marketing 
programs in effect. These include twenty-one milk distributing pro- 
grams, under five of which there is an excess supply distributed to 
relief clients at reduced prices. Milk wars have been eliminated. 

The marketing programs as respects various crops, have benefited 
both the farmers and the consumers. In addition, when farmers are 
well organized to sell their crops under the various marketing acts, 
they find that they can qualify readily for Federal crop marketing 
loans which assist orderly marketing and increase the margin of profit 
remaining for the farmer. 

The Department of Agriculture has been especially successful in 
removing large, market-depressing surpluses of many of California's 
important agricultural crops, by promoting their purchase by the 
Federal Surplus Commodity Corporation, for distribution in California 
and elsewhere to relief clients. This has meant not only a large direct 
augmentation of farmer income in California, but it has produced a 
much greater income because it served to stabilize and improve prices 
for the remaining major portions of their crops. 

California now has one of the best meat inspection systems in the 
country. The City of Los Angeles asked the department to take over 
their meat inspection service. This was done as of November 1st. 
State meat inspection service is now rendered in forty of the fifty-eight 
counties, insuring consumers a wholesome meat supply. 

The bovine tubei'culosis problem is at last about cleaned up in 
California and we hope for Federal certification thereto early in 1941. 

After years of effort, artichoke thistle infestation has been reduced 
from some 18,000 acres, mostly in Solano County, to less than 200. 
These lands have been restored to normal production purposes. 

The department, working with the University of California, is 
publishing a new weed-control manual for farmers. It will be of great 
value. 

Plant quarantines have been reexamined and corrections made to 
facilitate movement of restricted commodities. 

An outstanding achievement of the department has been the devel- 
opment of methyl bromide as a fumigant. It is already of enormous 



MESSAGES TO THE LEGISLATURE— 1 94 1 



99 



value to the agriculture industry of the State. It has reduced the cost 
of fumigation in warehouses, being more effective than older methods. 
Its use in treating California pears and potatoes has broadened the 
market for these commodities in other States because it kills the cod- 
ling moth in pears and tuber moth in potatoes. Its use as a furaigant 
against insect pests infesting nursery stock has been quite sueeessfial, 
enabling the movement and wider circulation and use thereof. 

Four cattlemen, selected by their industry, have reviewed the 
department's administration of the hide and brand laws. They have 
found State enforcement to be efficient. 

DEPARTMENT OF INDUSTRIAti RELATIONS 

In this department, notable improvements have been made in 
carrying out the provisions of the Labor Code for the protection of the 
workers, some of which for many years had become practically dead 
letters for laxity of enforcement. 

Kesponsive to the need for more prompt compensation of workers' 
compensation claims, the Industrial Accident Commission now meets 
every day except Saturdays, Sundays and holidays, and has accom- 
plished many procedural improvements to expedite the handling of 
compensation cases, so that the beneficiaries of the Workmen's Com- 
pensation Act receive the benefits of that act when they are most 
needed. Experience in its administration shows the need for amend- 
ments of procedural provisions of the act so as to further facilitate 
the prompt application of its benefits. The policies of the commission 
have been liberalized and its liberal interpretations of the "Workmen's 
Compensation Laws are being sustained by court decisions. As an 
instance of the commission's liberalization policies, hernia eases whicfh 
theretofore had been allowed medical treatment only during the first 
ten weeks are now treated as any other industrial injury and full 
benefits awarded; injured employees who must leave their home town 
for examination or special treatment are allowed reasonable expenses 
for board and lodging. Heretofore injured workmen were allowed only 
50 per cent disability compensation if able to perform light work even 
though such work was unobtainable. Under present policies they are 
allowed full disability compensation unless such light work is available. 

Elimination of the element of surprise at commission hearings and 
the saving of time of the commission and referees in reaching their 
decisions has been aided by making all records, such as X-rays, of 
injuries, available to both sides of any contest before the case comes 
for hearing. 

This department has diligently sought to reduce the number of 
accidents and per.sonal injuries in California's industries through the 
enforcement of safety laws and regulations and the thorough inspec- 
tions needed particularly at this time, although insufficiently budgeted 
for this service. The benefit of the Workmen 's Compensation Law and 
the safety measures in accident and personal injury prevention is shown 
in the fact that in 1914, when California's population was less than 
3,000,000, there were 691 accidental fatalities. In 1939, when the 



100 



STATE PAPERS AND PUBLIC ADDRESSES 



population was nearly 7,000,000, industrial fatalities were reduced to 
461 in number. 

• * « 

More determined enforcement of the Workmen 's Compensation Act 
has compelled many employers who have heretofore failed to comply 
with the act to carry insurance for the first time, and more than 
200,000 workers not heretofore covered, have been brought under the 
protection of Workmen's Compensation Insurance. More than 217,000 
employers are now insured. If all workmen 's compensation was exclu- 
sively written by the State Compensation Insurance Fund, great sav- 
ings in administrative costs could be made, the burden of workmen's 
compensation on the State's industries could be lessened, and the 
benefits of the act increased. 

The State Compensation Fund is solvent and strong. It has expe- 
rienced its greatest growth during 19.39 and 1940. In this period new 
business amounted to over $2,000,000 in premiums and accounted for 
more than 18,000 new policies. The fund insures more than 40,000 
employers whose employees number more than 600,000. 

• • * 

In the Division of Ijabor Statistics and Law Enforcement, not- 
withstanding serious understaffing due to insufficient appropriations, 
marked progress has been made in the enforcement of labor laws and 
improving general admini.stration. The division is handling a con- 
stantly growing and now very heavy load of labor complaints, both 
wage and nonwage. Laws for the protection of women and minors in 
industry are being fully enforced. To assist enforcement of child labor 
laws, a comprehensive digest of such laws has been prepared and dis- 
tributed widely through school authorities, employers and others. 

• * • 

The Division of Industrial Welfare is charged with the welfare of 
women and minors in industry. Prior to 1939, due to lax interpreta- 
tion of Industrial Welfare Commission orders, compliance with the 
minimum wage law was indifferent and "spotty." Since then, as a 
result of a series of law suits to enforce and a program of strict enforce- 
ment, this laAv is being observed to the letter throughout the State. 
Since February, 1939, the division has instituted 23 such suits, and won 
22 of them. As a result, nearly $500,000 have been added to the earn- 
ings of women and minors. 

• * * 

The Division of Immigration and Housing is handling a much 
heavier load of immigrant aid work and rendering a much improved 
service. 

The division as.sisted the Housing Authorities of Los Angeles, San 
Francisco, and Oakland by checking their housing plans for conformity 
with the State Housing Act. During 1940, some 150 plans for hotels 
and apartments were similarly checked. This work is increasingly 
important and necessary because of the unusual increase in housing 
construction adjacent to the Army training camps and elsewhere out- 
side incorporated cities. 

Following the Imperial Valley earthquakes, the division inspected 
practically all of the hotels, rooming and apartment houses in that 



MESSAGES TO THE LEGISLATURE— 1 94 I 



101 



district. As a result of the reports thereon, many of them were demol- 
ished because they were considered to be damaged beyond repair. 

The division has conducted several clean-up drives on shack-hous- 
ing in cities, in cooperation with local authorities, with excellent results. 
An outstanding example of this work is in the City of Stockton where 
a number of the older rooming houses have been vacated or demolished 
on tlie division's recommendations. 

* # * 

The law creating the California Apprenticeship Council was 
adopted in 1939 and has been in operation only since September, 1939. 
But it is already apparent that the council has carried its program to 
practically all of the industrial centers of the State and that the pro- 
gram has met with pronounced success. 

* * * 

The past two years have been much the most active in the history 
of the Division of Fire Safety. Special attention has been given to 
correcting hazardous conditions disclosed by inspections of State insti- 
tutions charged with the care and custody of some 28,000 persons, 
including insane, feeble-minded, narcotic addicts and juvenile delin- 
quents. For the first time in the history of the division, exhaustive 
fire surveys ha-\'e been made at six State Hospitals, at the Preston 
School and the Sonoma State Home. Recommendations have been 
made for corrective measures including new legislation. 

Dangerous hazards discovered and revealed by the division have 
resulted in a new building program at the Yountville Home and the 
razing of two tinder-dry barracks declared unfit and unsafe for use. 

Inspection revealed the existence of alarming fire hazards in the 
State Building at Los Angeles. These are being corrected. 

Inspection at Folsom has resulted in the correction of serious 
hazards, improvement of equipment and increase of fire department 
personnel. 

A fire survey of the University of California is now under way; 
the first in its history. Already some surprising and deplorable condi- 
tions have been disclosed. And recommendations have been made con- 
demning certain old buildings and calling for increased water supply, 
more fire alarm boxes, and elimination of unsafe practices. 

The Division of Fire Safety is self-supporting, out of fees collected 
paid by the cleaning industry in which, incidentally, a high level of 
fire safety is maintained. 

The State Fire Marshal's salary should be paid by the State rather 
than by private interests. The 28,000 wards of the State, in the 
various hospitals and institutions should be given adequate, organized 
protection from fire. The State, moreover, has invested some $30,000,- 
000 in the buildings housing them. 

DEPARTMENT OP NATURAL RESOURCES 

This department has initiated new and much needed programs for 
the conservation, development and utilization of our natural resources. 

In the past the several divisions of this department operated inde- 
pendently of each other, and of the department. The various policy- 
making boards and commissions had never met together. Joint confer- 
ences of these commissions have been instituted, resulting in their closer 



102 



STATE PAPERS AND PUBLIC ADDRESSES 



cooperation, and in the coordination of their programs. Plans for the 
multiple use of the areas controlled and protected by the department 
are being worked out with the expectation that they will result in 
greater returns to the State. 

* * * 

Intervention by the Department has been highly instrumental in 
preventing great wastage of natural gas in the Montebello oil fields. 
By securing the cooperation of the interests involved, the owners of 
wells in this field have been able to make arrangements to distribute 
large quantities of gas into consumptive channels and to store still 
larger quantities underground. Otherwise, this gas would have been 
blown into the air and lost completely. 

* # * 

The State Park Commission noAV has a program for the orderly 
development of the State parks. Heretofore there has been no pro- 
gram. Park areas are now being developed and opened to the public. 
Obsolete accommodations are being rebuilt and modernized. New 
SAvimming pools and camp sites are being provided. Public use of 
State parks has increased 45 per cent and reveimes therefrom 60 per 
cent. In 1939 13,000,000 people and in 1940 over 20,000,000 people 
visited our State parks. # # # 

The State Mining Board heretofore but little active, has been 
reorganized and reenergized. The board is making a special effort to 
stimulate the search for minerals and ores essential to the National 
defense. » * # 

The Fish and Game Commission has improved relations with the 
Sportsmen's organizations and with the industries dependent upon 
our fisheries. Its development and conservation program is meeting 
wide public approval. # # * 

For the first time in the history of the State, the Board of Forestry 
has a state-wide policy and program for the control and prevention of 
forest fires. The Forestry Board has also initiated a program for the 
reforestation of devastated forest areas, and is working in close coopera- 
tion with Federal agencies for reforestation and for flood and soil ero- 
sion control and for the development of farm forestry in California. 

DEPARTMENT OF PUBLIC HEALTH 

Califoi'nia has the right to be very proud of the service rendered 
by its Department of Public Health. In the past two years, new low 
records have been established in the incidence of typhoid fever, diph- 
theria and smallpox, infant mortality and maternal deaths. The tuber- 
culosis death rate is now the lowest in the history of the State. 

Special researches are being conducted into the nature, cause and 
cure of sleeping-sickness, influenza, trichinosis and occupational dis- 
eases. County public health services have been further extended; so 
also public health nursing services. 

Five motor clinics are now bringing dental service to pregnant 
women and to children living in rural areas. The crippled children's 
service has been extended. Mobile clinics render medical and public 
health service to thousands of migrants, both residents and new arrivals. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



103 



Last year more than 47,000 immunizations were given to migratory 
agricultural workers against smallpox, tj^phoid and diphtheria. 

Steady advance is reported in the work of controlling and stamp- 
ing out syphilis and gonorrhea. 

The new laws requiring premarital examination and prenatal blood 
tests for syphilis have already proved their worth in the discovery of 
hundreds of unsuspected infections in young people, and expectant 
mothers. With the continuation of these laws and expansion of the 
venereal disease control program, we believe that syphilis in new-born 
babies will soon be eradicated and that the incidence of acquired 
syphilis and gonorrhea will be greatly reduced. 

Recommendations for the improvement of health conditions in San 
Quentin Prison were made in a survey conducted by the State Depart- 
ment of Public Health in 1939, at the request of the Department of 
Penology. Complete studies were made of the method of purchasing, 
preparing and serving food, of the water supply and sewage disposal 
systems, and of general sanitary conditions. As a result of the survey, 
a chief steward was employed and the quality of food improved. Other 
recommendations are being put into effect. 

DEPAETMENT OF INVESTMENTS 

Some State banks are not large enough to afford independent 
audits. Therefore, the examining work of the State Banking Depart- 
ment has been expanded to include more minute inspection of banking 
operations. This has had a generally salutary effect and increased the 
safety factor protecting depositors. 

Two years ago there were 25 banks in liquidation, having assets 
estimated at $3,420,000 as against liabilities of $6,327,000. Fifteen of 
these have been closed out. The remaining ten have assets estimated 
at $1,182,000 as against liabilities of $3,690,000. Economical liquida- 
tion administration has, in some instances, enabled partial return of 
assessments paid by stockholders as well as 100 per cent return to the 
depositors. 

Some banks are not the most favorably located for purposes of 
making sound commercial loans in sufficient volume. This has encour- 
aged bond investment as an alternative. Therefore precautionary steps 
have been taken, for protection of depositors, to supervise their bond 
buying and selling operations. 

Steps have been taken to encourage banks to divest themselves of 
real estate taken on foreclosure, so as to forestall embarrassment by 
too great capital tied up in this form of investment. 

* * * 

Two years ago the Division of Building and Loan had 21 associa- 
tion in liquidation, all of which had been taken over in the period from 
1930 to 1935. Since then, six of these associations have been closed 
out, four more will be closed out early this year and three more before 
the end of this year. These closures have had a beneficial effect upon 
the building and loan association business generally. 

Two years ago the division was administering assets in liquidation 
totaling $9,000,000. They now total $10,500,000 ; an increase due prin- 
cipally to taking over the Mutual of Long Beach. 



104 



STATE PAPERS AND PUBLIC ADDRESSES 



Two years ago the division was adiiiiiiisteriug 411 parcels of real 
estate, plus two subdivisions, totalintr 1,134 lots. Now there are 493 
parcels, plus two subdivisions, containing 980 lots. All of this is 
exclusive of the Pacific States Savings and Loan Company. 

In spite of this hea\'y increase in business transacted and assets 
under liquidation, the several offices of the division have been consoli- 
dated in two offices, one in Los Angeles, the other in San Francisco ; the 
luiiiiber of employees has been reduced by about one-third, the payroll 
lias been reduced by about 50 per cent, and overhead expenses have 
been reduced. 

The Pacific States Savings and Loan Company was taken over in 
Mai'ch, 1939. The association was insolvent in excess of $10,000,000. 
It had ceased to finictiou as a building and loan association. For 
several years it had deliberately carried on policies contrary to the 
requirements of the Building and Loan Association Act. The greater 
part of its total assets had become frozen in various kinds of real prop- 
erty holdings and its management was engaged in purchasing at heavy 
discounts and losses to their owners its certificates of deposit by various 
and devious methods, taking advantage of their needs for their money. 
Ill the performance of his duty under the law the commissioner was 
compelled to take over the a.ssets of this association for the protection 
of the certificate holders to whom they belong and for whose benefit 
they must be litjuidated and distributed. Yet the take-over has been 
contested, and is still being contested in court by the former manage- 
ment. Rleantime. the affairs of the company have been operated by 
the Building and Loan Commissioner at considerably less cost for 
attorney fees than the former management had been paying, at con- 
siderably less cost for administration, and with much greater profit to 
tlie company than under the former management. Two dividends total- 
ing 12i per cent have been paid to the investors out of accumulated 
profits and collections of interest and principal on loans. 

Contrary to predictions, the taking over of Pacific States and the 
Mutual of Long Beach have had no harmful effect upon the active asso- 
ciations remaining in the business. In fact, the aggregate assets of the 
latter associations have registered substantial increases. There are now 
103 of these associations doing business under State license. They are 
generally in a very good condition; in better condition than at any 
time during the past ten years. Loan delinquencies are at a minimum. 
Foreclosures have practically ceased. The associations have no diffi- 
culty in obtaining new funds. Their most difficult problem is that of 
finding satisfactory loans in sufficient nunibei-. In the pa.st two years, 
these associations have increased and combined reserves from 14 per 
cent to 17 per cent of their liabilities; thus increasing the margin of 
safety afforded their investors. This compares most favorably with 
the Federal Savings and Loan Associations operating in California 
on a i-eserve of only about 4 per cent. 

During the past two yeai-s, at least thi-ee associations have been 
saved from very serious difficulties and possible liquidation by the 
guidance of the division. In each instance, additional capital was 
brought into the business, the management was changed to some degree 
and the business well started on the road to success. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



105 



The investing public may now confidently rely upon the office of 
the Building and Loan Commissioner to do its proper duty and the 
building and loan associations operating under the supervision of this 
division may justly take pride in the possession of their license certifi- 
cates entitling them to engage in the building and loan association 
business. 

DIVISION OF CORPORATIONS 

The work of the Division of Corporations during the past two 
years has shown material improvement, characterized by a decidedly 
larger volume of work accomplished with greater economy. New legis- 
lation added heavily to the division's duties and work. Nevertheless, 
it was accomplished without adding to the staff and without exceeding 
the budget which, when adopted, did not contemplate a drastic expan- 
sion of activities. 

During the past two years, special attention has been given to fraud 
prevention. 

Because of the sharp decline of the number and volume of security 
offerings, the income of the division from licenses and other sources has 
suffered seriously. Thus far, however, due to the assistance of the 
Department of Finance by way of instituting modernized office methods 
and other economies, the division has nevertheless been able to keep 
within its budget. 

The new California Small Loan Act and the Personal Property 
Broker's Act have now been in force long enough to prove their worth 
to the community. One proof lies in the fact that hordes of "loan 
sharks" retired from this field of business just prior to these laws 
becoming effective. The unsuccessful attempt to defeat the California 
Small Loan Law by referendum had a salutary effect upon several of 
the nation-wide "loan shark" chains, most of which clo.sed their offices 
when it became apparent that the law was to go into effect. However, 
there is evidence that these lenders are still looking at California with 
covetous eyes. There is indication that they plan a campaign at this 
session of the Legislature. Few people realize the nature and extent 
of social problems consequent upon the unhampered operations of "loan 
sharks" or the general damaging effect upon the entire economic and 
social structure of the community. 

Credit Unions, licensed by the State, have displayed a remarkable' 
growth during the last two years due, at least in part, to the new law 
liberalizing the rules governing their operation. In general, these 
Credit Unions, some of which are very small, have been very successful 
and have operated with benefit to their members and borrowers alike. 

There have been no "bucket shops" operating in California during 
the past two years. 

The new Stockholders' Protective Committee Act has likewise 
proved its worth. Under it, racketeering promoters have been denied 
]icen.ses while legitimate protective committees have found it easy to 
comply with the statute and have enjoyed protection against the com- 
petition of racketeering committees. 

* * tt 

The Division of Real Estate reports a most substantial revival of 
the real estate business; especially as reflected in the large increase in 

8—18527 



106 



STATE PAPERS AND PUBLIC ADDRESSES 



the number of men and women licensed to practice as brokers and 

salesmen. 

Added precautionary measures have been adopted to protect 
unwary investors aj^ainst sharp practices in the sale of oil and gas 
leases, cemetery lots and business opportunities. 

DIVISION OP INSURANCE 

Broader powers to protect the public grranted in 1939 to the Divi- 
sion of Insurance have been applied with salutary and beneficial effects 
already apparent. For the first time in our history the division now 
has competent investiprators and auditors in sufficient number to super- 
vise the conduct of ai2:ents, brokers, solicitors, as well as the insuring 
companies themselves. 

Labor-savinj; equipment and procedures have been installed with 
most satisfying results in efficiency and economy. 

Last year the bureau recovered $932,000 of policy proceeds and 
claim settlements for policyholders; nearly treble all previous yearly 
records. 

Eleven of California's so-called "Chapter Nine" mutual life insur- 
ance companies, operating only in California, having $58,000,000 of life 
insurance in effect and some 100,000 policies outstanding, were taken 
over. Investigations and hearings had disclo.sed misrepresentations, 
fraudulent claim settlements, exorbitant commissions to a few agents, 
inordinately high administrative expenses and excessive salaries to 
incompetent executives. Management has been assumed by division 
personnel at a cost of less than 19 per cent of salaries heretofore paid 
to officers and employees. Consideration is now being given to the 
rehabilitation of these companies so as to permit their return to inde- 
pendent operation. In the meantime, the policyholders are protected. 

Careful studies of the worker's compensation rates proposed in 
1939 accomplished a reduction of S-(\j per cent, which has now been 
in force one year and is saving California business over $2,500,000 a 
year. We can not anticipate comparable reductions every year, but it 
is the fixed policy of the division to keep rates at the lowest levels con- 
sistent with the stability of the carriers and adequate protection. 

The people may well be satisfied with the conduct of this division 
in which insurance companies, agencies and the insuring public alike 
have the highest confidence. 

DEPARTMENT OP INSTITUTIONS 

Introduction of the insulin shock treatment for acute ease of schizo- 
phrenia has yielded a recovery rate of 83 per cent. This disease 
accounts for a very high proportion of all patients in State hospitals. 
Heretofore the spontaneous recovery rate has been only 8 per cent. 

Cooperating with the State Department of Health, our mental 
hospitals are giving fever treatment, by malarial inoculation, for cases 
of syphilis involving the central nervous system before they have prog- 
gressed to the stage of insanity. At present, more than a third of all 
admissions of cases of this kind are admitted upon their voluntary 
application. Thej^ stay tAvo or three months and are then discharged 
as cured, being thus saved from the destiny of death or permanent 
insanity from their diseases. The trend of admissions of cases of neuro- 



MESSAGES TO THE LEGISLATURE— 1 94 I 



107 



syphilis indicates that before very long almost all such cases will be 
admitted in the early stages and that general paresis will become a rare 
disease instead of constituting, as it has heretofore, 7 per cent of all 
of our hospital admissions. 

By making new special provisions for outside care, we have been 
able to greatly liberalize and extend the parole policy for mental 
patients. Two years ago there were about 2700 patients on parole. 
Now there are over 4500; a net increase of about 1800 patients, or 67 
per cent. This new policy has produced great benefits for the patients, 
the institutions are relieved of some of their overcrowding, and large 
economies are realized. 

In spite of a growing admission rate, our system of outside care 
has enabled us to check the increase of population of our mental hos- 
pitals. In fact, recent months have produced an actual reduction, the 
first in the history of the department. 

In the meantime new construction has increased the capacity of 
our mental hospitals by 1284 beds. The net results, thus far, has been 
a reduction of overcrowding from 25 per cent to 20 per cent. 

The medical work and the general care of our patients lias been 
raised to a higher standard. This is perhaps best demonstrated by the 
sharp reduction in the death rate among patients in the seven mental 
hospitals. 

The new activities of the department have, of course, necessitated 
fairly large expenditures for transportation, new equipment, and addi- 
tional specially trained personnel. Nevertheless, economies growing out 
of our extension of extra mural care have enabled the department to 
restore to employees salary adjustments in the amount of over $750,000 
for the current biennium. 

* * * 

During the past year two deaths occurred in the Whittier State 
School for Boys, wOiich were apparently suicidal. Inquiry into the 
circumstances and means of discipline used in handling recalcitrant 
boj^s in the school, made by the Director of Institutions and by a com- 
mittee appointed by the Governor to thoroughly investigate the case, 
failed to disclose any evidence of corporal punishment or abuse of the 
boy, or other boys in the school, and that committee selected by the 
Governor upon the recommendation of relatives and friends of the boy 
made a report exonerating the Superintendent and all persons employed 
in and about the school for any blame in connection with his death. 
When the second suicide occurred, widespread public interest and 
indignation was aroused, in the belief, drawn from publicized state- 
ments of former inmates of the school and others, that attendants in 
cliarge of enforcing discipline in the school customarily engaged in 
inflicting corporal punishment upon runaway boys and for violations 
of disciplinary rules. In order to have such accusations and also the 
disciplinary means and methods used at the school fully investigated, 
I appointed a committee of three outstanding citizens experienced in 
handling juvenile delinquents and incorrigibles and sincerely interested 
in their reformation and welfare. This committee has made such an 
investigation, has heard volumes of testimony and received reports from 
any and all sources from which they believed truthful information 
might be obtained that would help them to reach conclusions of fact 



108 



STATE PAPERS AND PUBLIC ADDRESSES 



and report their conclusions and recommendations to the Governor's 
office. This report has been made. It embraces findinj^s and conclu- 
sions of this committee that corporal punishment and brutal treatment 
has been commonh^ inflicted by attendants in char<re of boy.s in the 
school who have been segregated for escaping or violating the rules of 
the school. As a result of this investigation one such attendant was 
indicted by the grand jury of Los Angeles County for violating the 
State law against corporal punishment in a State in.stitution, and upon 
that indictment was tried and found guilty. In the light of this report, 
I have requested the State Personnel Board, with whom a copy has 
been filed in support of charges against the Superintendent of tlie 
Whittier School, to consider that report as charges affecting all persons 
employed in the institution for the purpose of making a thorough inves- 
tigation of the matters thus reported to me as facts in regard to the 
treatment and handling of inmates of the school by their attendants. 
Inasmuch as this report Avould be secondary evidence before the Per- 
sonnel Board in support of any charges, and in order that appropriate 
action justified by facts may be legally taken, a hearing and investitra- 
tion of the whole matter must be held by the Personnel Board, which 
is the only authority to make removals of State Civil Service employees 
for cause. Recommendations have been made to me bj^ said investi- 
gating committee with regard to a reformation of the system of handling 
the inmates of the Whittier School for Boys, and the qualifications of 
personnel employed at the school for that purpose, which I deem worthy 
of consideration and upon which I propose to act at the proper time. 

DEPARTMENT OF EMPLOYMENT 

The Department of Employment has two principal functions; 
finding jobs for workers and workers for emploj^ers, and administering 
unemployment insurance. The performance of both of these functions 
has been improved substantially during the past two years. 

Specifically, the employment service to farmers and farm hands 
has been improved. During the past season, for the first time, workers 
could learn definitely where jobs were to be had, farmers could learn 
where to get workers on short notice, migrants were saved thousands 
of dollars in travel expense, there were no excess concentrations of 
labor, orders for workers were filled on request — even in isolated areas 
and, for the first time in many years, the agricultural season passed 
without a major strike. 

Specifically, effective job-finding service is now rendered to youth, 
to young men discharged from the CCC's and to war veterans. Cali- 
fornia holds the record in the Nation for veteran placement. 

Specifically, the department is working in closest cooperation with 
the National Defense Program, having placed thousands of skilled 
workers in the aircraft and other defense industries. The department, 
with funds made available by the State Department of Education, has 
inaugurated job training and retraining programs in which men have 
been given training for both old and new occupations — to assure a 
continuous supply of skilled workers. 

Up to date, the department has collected over $280,000,000 in 
contributions to the Unemployment Insurance Fund from 50,000 
California employers, and disbursed over $115,000,000 in unemploy- 



MESSAGES TO THE LEGISLATURE— 1 94 1 



109 



ment benefits. The balance in the fund exceeds $165,000,000. The 
fund now protects more than 1,500,000 workers. Thus far, there has 
been no quarter in which disbursements have exceeded income. How- 
ever, there is some tendency toward equalization of income and dis- 
bursements. 

A year ago at this time, charges were current that thousands of 
persons were obtaining insurance benefits illegally ; that students were 
paying their way through college on unemployment insurance benefits ; 
and that the fund was being used for health insurance. Four hun- 
dred twenty-four persons have been convicted in the California courts 
for obtaining money from the fund illegally. Chiseling has been 
stopped. The department is not financing college educations. And 
the department is not paying insurance to anyone who, because of 
sickness, can not take employment in his usual occupation. 

More persons than ever before are obtaining jobs through the 
State Employment Service. Unemployment insurance benefits are 
being paid more promptly. The department has strengthened its 
relationships with both employers and employees. The department 
has become the center of labor placement for the defense industries. 
The department has reached that level of efficiency where it can, 
readily and efficiently, take care of an increased load, should this 
Legislature decide to place all workers in California under the pro- 
tection of unemployment insurance. 

The activities and policies of the Department of Employment 
stabilize and strengthen the economic life of the State. 

DEPARTMENT OP MILITARY AFFAIRS 

The California National Guard has been raised to new high levels 
of size and efficiency. Training schedules have been made more rigid 
and now embrace the newer developments in military arts. Personnel 
standards have been raised. 

Two years ago the Guard's strength was 7,501 officers and men. 
Today it is 10,975. Old units have been increased in size and many 
new units have been organized. All units are modernized. 

Some armories have been remodeled ; some new facilities erected. 
Two new armories have been built and one is now under construction. 
Many more are urgently needed and are in contemplation. 

The Guard camp near San Luis Obispo has been enlarged by the 
purchase of 1,300 acres of additional land and the whole camp leased 
to the War Department which is building a large troop training can- 
tonment thereon. 

The schooling program for both officers and enlisted men has 
been enlarged. 

Induction of the California National Guard into Federal service 
for a year of intensive training started last September 16th. It is 
contemplated that the entire Guard will have been called up by the 
end of this month. 

The office of The Adjutant General is now engaged in framing 
plans for a State Guard to perform the normal peace-time duties of 
the National Guard when all of the latter shall have been inducted 
into the Federal Service. The State Guard will be on a voluntary basis 
and composed of men not subject to military service. 



110 



STATE PAPERS AND PUBLIC ADDRESSES 



The National Guard is an organization of enthusiastic men ani- 
mated and bound together by a high esprit de corps. It is proud of its 
past record and its high professional standards. As the several units 
pass into the Federal service, we may be sure that they will reflect 
great honor upon the State of California. 

In anticipation of the passage of the National Selective Service 
and Training Act, plans for its administration in California were made 
through The Adjutant General 's office many months in advance. These 
plans have since been executed with efficiency, dispatch, and great 
credit to the State. 

* * * 

The outstanding development within the Veterans' "Welfare 
Board during the past two years is that its home purchase opera- 
tions have come to an end, all funds placed at its disposal having been 
used in full. Very substantial operating economies have been effected. 
The board's affairs are in excellent condition. 

DEPARTMENT OF MOTOR VEHICLES 

In the past two years, economies have been instituted in the 
Department of Motor Vehicles effecting savings of nearly $500,000 a 
year. This has enabled payment of the long delayed salary increases 
due employees under the Civil Service Act. At the same time, efficiency 
and service have been improved. 

The department carries on a continuous campaign of safety edu- 
cation and the Highway Patrol continues to render efficient service, 
but additional patrolmen are probably needed. 

HORSE RACING BOARD AND ATHLETIC COMMISSION 

The California Horse Racing Boai-d and the State Athletic Com- 
mission have accomplished many reforms in aid of clean and honest 
races and athletics conducted by their licensees. They are performing 
a highly constructive service to the licensees, their patrons and the State. 

BOARD OF STATE HARBOR COMMISSIONERS 

The San Francisco Harbor Board, faced with a 35 per cent 
reduction in number of ships visiting San Francisco Harbor (due 
principally to war conditions), by an annual loss of $350,000 in ferry 
boat revenue, and by the necessity for extensive repairs (too long 
deferred) to the railroad equipment, buildings and piers belonging 
to the board, has nevertheless succeeded in reducing staff and expenses, 
increasing the number of freight cars moved, making extensive repairs 
of rolling stock, tracks, buildings and piers, developing new revenues, 
collecting old debts, reducing insurance rate and premium charges, 
improving harbor services, and giving the personnel their automatic 
pay increases; all Avith the result that the board's budget will be 
balanced by the end of this biennium. 

The board is working in close cooperation with Army and Navy 
officials in the National defense program. 

The President of the board, has performed a signal service for the 
State by assisting west coast ship-building interests to secure contracts 
for the building of ships on the Pacific Coast. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



111 



Present plans contemplate converting the Ferry Building to use 
as a bus terminal. A start in this direction has already been made. 
Traffic studies indicate that a centering of all interurban bus trans- 
portation in and out of San Francisco at the Ferry Building, would 
serve the best interests of the general public as well as most business 
interests. 

The board contemplates redesigning the piers at the Ferry Build- 
ing in order to accommodate the large passenger ships contemplated in 
the Federal ship building program. This development would make 
San Francisco the most famous and unique port in the world for the 
handling of ocean passenger business. 

DEPARTMENT OP SOCIAL WEIiPARE 

Under the Department of Social Welfare, 143,000 of California's 
elder citizens are now receiving old age assistance. They are deeply 
grateful for the release of liens against their property and for the 
increased monthly allowance from $35 to $40. The average payment is 
about $38 per month. 

The State has increased the proportion of costs paid for financial 
aid to dependent children, thus relieving the overburdened counties. 
Care for children in rural California has been extended and specialists 
made available under the Child Welfare Service. 

Administration of the whole Social Security Program has been 
improved and mutually satisfactory arrangements between the State 
as the supervising authority, and the counties have been achieved. 

The State is preparing the first manual for administration of aid 
to the needy aged, the blind, and children, for distribution to county 
agencies. A State Hearing Officer has been employed so that needy 
persons appealing to the State Board of Social Welfare, but unable to 
get to the place where the board meets, can be heard in their own 
communities. 

Thanks to cooperation with the State Fire Mar.shal's office, the 
inmates of all institutions in the State for aged persons, and children, 
are being given the most careful protection from fire hazards. 

There has been no increase in the percentage of administrative costs. 

STATE BELIEF ADMINISTRATION 

Administration of State relief in the form of cash doles to the 
needy unemploj^ed has been rather a hectic job in every administra- 
tion, due to a number of causes but principally to the underlying 
cause for State relief. That is the dire distress, need and want for 
sustenance by so many hundreds of thousands of people in poverty 
and unable to find a place in which to work for their own maintenance. 
Organized pressure groups voicing the complaints of many in need 
of relief who are on the borderline of eligibility but who have not been 
admitted to the relief rolls have harrassed every administrator, par- 
ticularly during the periods when the number needing relief was 
nearly three times greater than in recent months. And individual 
leaders with a revolutionary or social upheaval purpose have caused 
dissensions and made disturbances for relief administrators in dis- 
regard of the limitations of the powers of the administrators and often 
in disregard of the reasonableness of their protests. The number 



112 



STATE PAPERS AND PUBLIC ADDRESSES 



employed in the administration of relief has varied with the Tips and 
downs of the relief ease load, and administrators have been harrassed 
by pressure groups to be retained while others were laid off, and by 
those who were laid off, for reemployment, all due to their dire need 
for employment and constituting another manifestation of the unem- 
ployment problem. Conflicting needs for retaining or obtaining 
emploj'ment have often inspired inifounded criticism of individuals 
as being incompetent for the jobs they seek to hold. Such charges 
are to often erroneously accepted as facts by those disposed to criti- 
cize rather than cooperate in establishment of harmony and systematic, 
orderly procedure in employments and layoffs based upon a sense of 
fairness to all concerned. 

Charges have been common that there has been a disposition on 
the part of this administration to give employment in the administration 
of relief purely as rewards for political party service in the election 
of this administration, regardless of their competency. But the fact is 
that no administrator has ever been requested^ — no administrator has 
ever been authorized by me to employ any person incompetent to per- 
form the work for which he has applied. And it has been left to every 
administrator and his personnel division, working under contract with 
the State Personnel Board, under classifications, standards, ratings and 
qualifications established by it for the varioiis employments, to deter- 
mine the qualifications of each according to such standards. Tn order to 
relieve the administrator of the burden of hearing complaints as to 
discrimination and unfairness in layoffs and emplojinents, there was 
designated under one administrator a board of personnel standards and 
appeals to hear such complaints and assist the administrator in dealing 
fairly with all persons concerned, and in all possible ways to assist in 
improving efficiency of this service and keeping the cost of administra- 
tion within a limit of 15 per cent of the appropriation for relief, which 
I consistently recommended, and which recommendation was finally 
embraced in the relief appropriation act. 

A joint legislative committee of the preceding Legislature has spent 
much time and money in the investigation of every relief agency in 
the State. In its hearings many loose, unfounded and utterly false 
statements have been made regarding employments in the relief admin- 
istration by persons disgruntled because they have been discharged. 
Irrational, intemperate and false statements have been made by disap- 
pointed and vengeful individuals. 

Good faith in seeking the distribution of the moneys appropriated 
for relief to the fullest possible extent to those for whose benefit it was 
intended has even been questioned by such persons in hearings of their 
ex parte and nnsupportable statements. 

Any imputation that it was ever the purpose of this administration 
to make a political machine of the relief administration by appointing 
persons as rewards for their political activities and regardless of compe- 
tency and merit is disproved by the fact that I have consistently here- 
tofore and I am today recommending that the Legislature enact a law 
placing the State Relief Administration under civil service beyond the 
control of its employees for political purposes. 

Fortunately, with the drastic drop in the relief load and the 
prospect of continued employment of its employables in industry due to 



MESSAGES TO THE LEGISLATUEE— 1 94 1 



113 



the increased Federal expenditures in preparing: for National defense, 
we can look forward to the need for a bndpret not to exceed $20,000,000 
a year dnrinj]: the next bienninm for whatever form of nnemployment 
relief that may be provided for by the Lepjislature. 

In my recent visit to Washingfton I was reliably informed that 
the National Administration contemplates a continuation of the WPA 
on approximately its present scale of WPA employments, which in 
California now provides for about 75,000 eases. It is to be hoped that 
there will be no let-down in WPA employments as there was in the 
latter part of 1939, when some 30.000 cases were dropped from th'» 
WPA rolls onto the State relief rolls, increasing the State relief load 
to an all time high in the early part of 1940. 

THE STATE PAIR 

The conduct of the State Fair has been attended with extraor- 
dinary success. The 4-11 Clubs and Future Farmers organizations now 
have 15 new exhibit buildings which they crowd to capacity. At last 
September's fair the live stock exhibits were larger than ever before; 
the educational exhibit buildings were filled to capacity; the night 
attractions were exciting and drew capacity audiences; the grounds 
were greatly improved ; the crowds were pleased with improvements in 
the conduct of racing events. Exhibitors and concessionaires alike 
were pleased and the attendance broke all records, reaching a total of 
718.625. Since closing of the Exposition at Treasure Island, several 
buildinjrs and much exhibit material has been transferred to the State 
Fair Grounds. 

DEPARTMENT OF PENOLOGY 

The Department of Penology has been reestablished and made to 
function. 

A private contract made by the old prison board with a firm of 
architects to do the architectural work for the Chino Prison, instead 
of having that work done by the State Division of Architecture, was 
canceled at a direct saving to the State of approximately $150,000. The 
architectural work is being done by the State Director of Architecture 
under reformed plans to conform with the original intent of the Legis- 
lature in providing for the establishment of this institution. This has 
resulted in further large savings. 

The most comprehensive and scientific study of prison feeding ever 
made in the United States was made in 1939 at San Quentin. The 
direct result was the hiring of a chief steward, improvement in the 
quality and nutritive value of food served, and the elimination of waste 
formerly suffered from bad preparation. 

Corporal punishment in connection with the enforcement of dis- 
cipline in San Quentin Prison has been abolished and orderly com- 
pliance with law and prison regulations now prevails in that penal 
institution. 

Several divisions of the Department of Penology heretofore 
scattered are now being consolidated in the Ferry Building at San 
Francisco with prospect of increased efficiency and economy. 



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STATE PAPERS AND PUBLIC ADDRESSES 



BOARD OP PRISON TERMS AND PAROLES 

Inability to find outside jobs, a condition of parole, continues to 
delay the parole of many prisoners. Last year 544 prisoners approved 
for parole were forced to remain in prison for this reason, and another 
284 were discharged, having served their sentences in full, who could 
have been released much earlier had jobs been available. 

Experience with road camps and prison farms has been most satis- 
factory. Their expansion is strongly iirged. 

The board constantly strives to improve the type of information 
upon which paroles are granted. Increased attention is given psychi- 
atric findings. 

Continued increase in the number of sex offenders is a matter of 
grave concern. Their segregation and special treatment are especially 
difficult. It has become apparent that prison is not the solution for 
the constitutional psychopathic inferior type of criminal with anti- 
social tendencies. The board is trying to provide for clinical psychi- 
atric treatment and observation for paroled sex offenders. 

In 1939 California became a signatory to the Interstate Parole 
Compact for the supervision of parolees and probationers. Experience 
thereunder has been qiiite satisfactory. 

The board has established its office in the Ferry Building in San 
Francisco with an executive secretary. Here for the first time in the 
history of the State's parole SA^stem, members of the board are avail- 
able to relatives, dependents, attorneys and friends of inmates and to 
others properly interested in parole problems. The executive secretary 
spends part of his time in Los Angeles for parole interviews. This 
service has afforded tremendous relief to hundreds of distressed rela- 
tives of prisoners in furnishing them accurate information about the 
length of prison terms and parole requirements. 

Considerably more time than ever before is now being spent by 
members of the board in consideration of parole cases. Last year, 4,746 
cases were considered by the board at meetings held in San Quentin 
and Folsom Prisons. In each case, the inmate appeared personally 
before the board for the purpose of having his sentence fixed or his 
parole application considered. 

DIVISION OF NARCOTIC ENFORCEMENT 

Although in operation only a few months, the benefits of the new 
Narcotic Prescription Control law are already apparent. The com- 
pulsory reports thereunder disclose large amounts of narcotics being 
supplied to known addicts; addicts procuring prescriptions from two 
or more physicians at the same time ; addicts using different names Avith 
different doctors and many other startling and flagrant abuses. The 
division is only now and for the first time in position to make individual 
investigations of disclosures developed by the prescription control 
system. 

The division works in closest cooperation with Federal and local 
enforcement officers, and as a result the country now has a nation- 
wide net work for the apprehension of illicit manufacturers, importers 
and distributors of narcotics. In the past two years, many spectacular 
captures have been made of marihuana, heroin, Japanese "cotton" 
morphine, cocaine and opium. These captures, together with the 



MESSAGES TO THE LEGISLATURE— 1 94 1 



115 



seizure of 62 automobiles have been a strong factor in crippling the 
narcotic traffic. 

Nevertheless the prevalence of drug addiction remains astounding 
and alarming owing to the many difficulties encountered in its pre- 
vention. For example, it is stated that it will require a 10-year pro- 
gram to eradicate marihuana, because of the widespread growth and 
easy access to this destructive drug plant. 

# * * 

The new Prison Board, in the six months since its appointment, 
has sponsored and effected a series of constructive projects, better- 
ments and reforms much needed to give California a practical, humane 
prison administration. The results so far achieved justify confidence 
that the board is proceeding in the right direction. There has been 
a marked improvement in prison morale and discipline, both at San 
Quentin and Polsom. Brutalities have been abolished. Officials and 
guards responsible for brutalities have been siimmarily discharged. 
Political control has been eliminated and standards of prison manage- 
ment materially raised. 

Plans have been adopted and are under way for creating more 
useful work opportunity for the inmates, to expand the present prison 
road camps and to establish prison forestry camps in isolated sections 
of the State parks and forest areas. 

The policy of making the new prison at Chino, in San Bernardino 
County, a minimum seciirity ratlier than a maximum security institu- 
tion, and to operate it largely as a prison farm, is being followed by 
the board. 

The Detective License Bureau, an adjunct of the State Board of 
Prison Directors, is being revamped. 

The State Parole Office is in the process of complete reorganization 
to provide more adequate supervision over parole prisoners. A merit 
system for the selection of employees has been inaugurated. The parole 
office will have a higher type of personnel and more modern facilities 
to meet existing conditions. 

RECOMMENDATIONS 

I shall not attempt in this message to recommend all the legisla- 
tion which I consider is needed, but I here make the following recom- 
mendations : 

UNEMPLOYMENT RELIEF 

I recommend changes in the basic policy governing the handling 
of unemployment relief. Members of this, and of the past Legislature, 
and the general public as well, know that I have constantly advocated 
abandonment of the cash dole and the substitution therefor of work 
relief, including productive work, making opportunities for the unem- 
ployed to produce for their own needs. 

I still oppose the dole. If I were to amplify this statement, I 
would only be repeating messages transmitted to you in the past and 
contained in your journals. 

I now recommend that the State Relief Administration should be 
provided with funds and empowered to give employment to the unem- 
ployed and training for employment. The Relief Administration 



116 



STATE PAPERS AISTD PUBLIC ADDRESSES 



should cooperate closely with the State Employment Service with a 
view to finding jobs for the unemployed in industry. The Relief 
Administration should sponsor public works' projects providing work 
for tliose who can not be placed in industry. The Relief Admin- 
istration, cooperating with the Employment Service and with our State 
and local educational institutions should conduct and provide voca- 
tional cour.ses of instruction to train the unemployed for skilled 
and semiskilled jobs. Such courses, of course, should be equally 
available for all job-seekers, whether they be eligible for relief or not. 
Job training should be a definite public policy; especially as long as 
there are large numbers of workers seeking jobs and defense industries 
in need of trained workers. 

Giving job training to unemployed workers will for a time cost a 
little more than the cash dole but to the extent that it fits them for 
jobs now waiting, it will in the long run be a profitable policy. 

The policy of work relief will draw the line, clearly and sharply, 
between employable and unemployable. The giving of jobs and the 
doing of work will eliminate the onus of public charity. Even more, 
it will make certain that no chiselers will be found on the relief rolls. 

CENTRAL VALLEY PROJECT 

One subject of the most vital concern to the people of California 
is the development of our natural resources in a manner assuring maxi- 
mum benefits therefrom to the people. As a part of this concern, we 
have the great Central Valley Project. So very miich depends upon 
the manner in which it shall be organized, how the costs of the various 
elements of the project shall be apportioned to navigation, flood control, 
salinity control, irrigation and electric power ; how the water and 
power shall be distributed to the people and how much they shall cost ; 
and how the great Central Valley region shall be developed in order 
to improve the welfare of the people who live there. 

If the Central Valley Project is to be planned and operated so 
that its benefits shall really inure to all of the people, then we must 
develop definite, comprehensive, long-range plans and operating policies 
for the project. "We must do this either by creating a California 
Authority fully empowered to serve these purposes and to help finance 
publicly-owned facilities for the distribution of electric power generated 
by the project, and to aid and promote new industrial developments 
and economic opportunities built upon the vast mineral forest and farm 
resources of the region, or by a Federal Authority clothed with ample 
powers by the National Congress. 

Heretofore I have recommended amendments to our Central Valley 
Project Act to give our Central Valley Authority the power to pro- 
ceed with such plans; particularly through the release and sale of a 
portion of the originally authorized revenue bonds to help finance 
local, publicly-owned electric power distribution systems. 

But the Legislature has not seen fit to grant these powers. 

And, being somewhat doubtful that the present Legislature would 
act favorably to such recommendations, I recently presented to the 
President of the United States the proposal that, since the Federal 
Government has assumed the cost of and is constructing the main 
features of the Central Valley Project, it should go further and 



MESSAGES TO THE LEGISLATURE— 1 94 1 



117 



establish a Federal Regional Authority with full powers to secure its 
benefits to the people. The President's reaction was immediately 
favorable. He said he would favor the enactment by Congress of the 
necessary legislation establishing such an authority. As a result, a bill 
will be introduced in Congress providing for the establishment of a 
regional Central Valley Authority or a Pacific Southwest Authority 
which would also have similar jurisdiction in the Colorado River Basin. 
This solution of the Central Valley problem will, if adopted, save time, 
eliminate confusion and the delays incident to divided authority, and 
assure the effective integration of all of the great benefits potential in 
the project. 

In the meantime, however, as a safeguard and to facilitate the 
organization and construction of publicly-owmed electric power distri- 
bution systems by cities and utility districts, I again recommend 
amendments to our Central Valley Act, releasing revenue bonds author- 
ized by the act and enabling their use to help finance local public 
utility districts. 

I also recommend that memorials be addressed to the President 
and Congress urging further aid and the establishment of the proposed 
regional authority and greater speed in the construction of the Central 
Valley Project. 

USURY 

Later on, during your session, I expect to make recommendations 
for further regulation and control over the small loan business, to 
prevent usurious charges. 

HEALTH INSURANCE 

I repeat here a recommendation I made two years ago that Cali- 
fornia adopt a system of universal compulsory health insurance. The 
need and demand for such insurance is amply demonstrated by the 
many plans proposed or already in operation, including that advanced 
by the medical association. These plans are all constructive in pur- 
pose and many of them are quite useful within their limits but, by 
their very nature, they can not meet the broad needs of society. 

There is but one method that is socially adequate. That is the 
method already applied to Workmen's Compensation Insurance, Old 
Age Insurance and Unemployment Insurance. It is the method apjilied 
to health insurance in 24 of the 27 countries having health insurance; 
that is, by making it both universal and compulsory. In our Depart- 
ment of Employment, which administers unemployment insurance in 
California, we already have ihe machinery and the organization to 
take over the work of administering a health insurance plan. 

STATE HOUSING AUTHORITY 

I again recommend the creation of a State Housing Authority. 

AGRICULTURAL LEGISLATION 

I recommend still further strengthening of our agricultural mar- 
keting laws. This is needed not only to improve the farmer's economic 
position but also to counteract the weakening effect of recent court 
decisions. 



118 



STATE PAPERS AND PUBLIC ADDRESSES 



The practice of submitting so-called "open-price" contracts to 
farmers in California still continues a source of irritation to growers 
and State enforcement officials. Under these so-called "open-price" 
plans, the grower is more or less at the mercy of the buyer in so far as 
the price he receives for his product is concerned. This matter should 
be studied by the Legislature with the hope that protective features 
for the growers can be devised to eliminate the losses which so 
frequently result from these contracts. Laws establishing and main- 
taining high quality standards for farm products entering the markets 
need strengthening. 

Interstate trade barriers are hampering free movement of Cali- 
fornia's agricultural products. The California Commission on Inter- 
state Cooperation should be empowered to move legally to help solve 
these problems which have such important bearing upon our relations 
with other States. 

SOIL CONSERVATION 

I again recommend legislation relating to soil conservation 
through the control of run-off and the prevention and control of soil 
erosion, establishing a State Soil Conservation Commission and pro- 
viding for the organization and operation of soil conservation districts. 

REORGANIZATION OP GOVERNMENTAL AGENCIES 

For reasons set out in my message of May 18, 1939, I again recom- 
mend legislation and constitutional amendments providing for the 
reorganization of the State's fiscal operations, including tax collections, 
pre-audits and post-audits of expenditures, and the handling and invest- 
ment of State funds. 

LIQUOR CONTROL 

I again recommend the creation of a separate State agency to 
administer State control of the manufacture, transport, sale, purchase, 
possession and disposition of alcoholic beverages, and a restoration of 
the State Board of Equalization to its original status as a board of 
equalization of assessment of State and county taxes. 

INDUSTRIAL RELATIONS 

The need still exists for a State Labor Relations Act to provide 
machinery for the peaceful settlement of jurisdictional disputes, strikes 
and lockouts in intrastate commerce. 

UNEMPLOYMENT INSURANCE 

I recommend the broadening of the California Unemployment 
Insurance Act to include all industrial and agricultural employees so 
that no worker will be excluded from the benefits of this insurance. 

VfORKMEN'S COMPENSATION INSURANCE 

The benefits, accruing alike to workmen and employers, still war- 
rant legislation vesting the writing of Workmen 's Compensation Insur- 
ance exclusively in the State fund. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



119 



HORSE RACING 

The California Horse Racing Law should be amended in several 
respects. Greater revenue should be derived to the State from the 
operation of tracks licensed by the State, and numerous amendments 
are recommended by the Racing Board, needed to better enable the 
board to administer the law in accordance with its purposes, in order 
to increase revenue, aid horse breeding in California, and aid the 
enforcement of fair-dealing and honest practices in the operation of 
the tracks and in the conduct of racetrack employees. I commend to 
your careful consideration the specific amendments recommended by the 
Horse Racing Board. 

DIVISION OF INSURANCE 

I recommend submission to the people for vote, an amendment to 
the State Constitution to progressively eliminate the right to deduct 
certain real -estate taxes from gross premium taxes, and to equitably 
modify the premium tax rate. Under present constitutional provisions 
the right to deduct real estate taxes has resulted inequitably in favor 
of those companies which, due to the depression, have acquired by 
foreclosure unprecedented amounts of real estate. The mounting size 
of these deductions affect State revenues very adversely. The insur- 
ance companies themselves, recognizing this situation, agree in princi- 
ple with a plan for equitable progressive adjustment. 

MEMORULS TO THE NATIONAL GOVERNMENT 

I believe that memorials should be addressed to the President and 
the Congress as follows: 

1. Giving assurance of California's complete support of and desire 
to cooperate in the National defense. 

2. Urging additional Federal appropriations to connect military 
cantonments with existing State highway systems and to improve and 
enlarge the capacity of highways and bridges where necessary to meet 
the extraordinary requirements of military use. 

3. Calling attention to the large number of workers remaining 
unemployed and in need of relief in California; to the value of WPA 
work projects to the National Defense Program ; and asking for con- 
tinued large "WPA allocations for California. 

4. Calling attention to the housing shortage emergency induced in 
several areas in California by the rapid expansion of war industries 
and urging prompt response thereto. 

5. Calling attention to the need of Federal aid for low cost hous- 
ing projects in certain rural areas of California. 

6. Calling for a study of the effects upon our economy of foreign 
war purchases and of National defense spending, and of the economic 
repercussions which may be expected when peace comes; and calling 
for the formulation of policies and programs for economic readjust- 
ment to peace. 

7. Declaring our belief that old age pensions should be Federally 
financed and administered in their entirety. 

8. Urging continued and enlarged appropriations for the more 
rapid development of the Central Valley Project; calling attention to 
the value of the project to the National defense. 



120 



STATE PAPERS AND PUBLIC ADDRESSES 



9. Reminding that the migrant problem remains very serious and 
distressing in California; asking continued support of the studies of 
the Tolan Committee; and asking enlarged allocation of funds for 
relief and rehabilitation of migrants. 

10. Calling attention to the need for further flood control and 
navigation work in California. 

11. Calling attention to the need for measures to remove and 
restrain interstate trade barriers. 

12. Supporting the establishment of a Federal Executive Depart- 
ment of Education and increased Federal aid for education and public 
health services including proposals for National hospitals for tuberc- 
ulars. 

CONCLUSION 

In concluding tliis message I wish to make these observations : 
Our most pressing and acute problems, mass unemployment and 
taxation for its relief, have been rendered less acute and less pressing as 
a result of hea^'J' National defense spending. Nevertheless we must 
regard this condition as temporary. We must give serious thought to 
the recurrence of these problems which will attend the return of peace. 
They may recur in forms even more aggravated than we have experi- 
enced in the pa.st, and when war ends, which we all fervently hope 
shall be soon, we shall also have to face payment of its costs. In other 
words, the legislative and executive branches of our government must 
give every aid and support to the National defense. But we should, 
at the same time, anticipate the disturbing realignment of social and 
economic forces consequent upon the return of peace and prepare for 
readjustments thereto. If we can, in the preparedness for peace, 
preserve and apply the same high purpose and National unity which 
prompt and support our present efforts to prepare our National and 
home defenses, we shall be better prepared for the solution of our 
internal problems and to maintain the confidence of the people in 
democratic processes and democratic institutions. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 



MESSAGES TO THE LEGISLATURE— 1 94 1 



121 



BUDGET MESSAGE 



State op California, Governor's Office 

Sacramento, January 24, 1941 

To the Senate and the Assembly of the State Legislature 
of California 

In accordance with the provisions of Section 34, Article IV of the 
State Constitution, I herewith submit for your consideration a budget 
containing a complete plan and itemized statement of all proposed 
expenditures provided by existing law and recommended for each fiscal 
year of the biennium beginning July 1, 1941, and ending June 30, 1943, 
together with the comparisons of revenues and expenditures, as required 
by that section. 

Expenditures recommended in this budget, totaling $552,570,000 
are $13,487,000 below the actual and estimated expenditures for the 
current biennium. Estimated receipts are $613,070,000, or $54,532,000 
more than the amount for the present biennial period. If this estimate 
pi'oves correct, the excess of General Fund revenue over expenditures 
will retire the existing deficit in its entirety and permit the State to 
close the coming biennium with a General Fund surplus of $11,000,000. 
This prospect is, of course, contingent upon three factors : 
First, the continuance of the National defense program with its 
huge expenditures and consequent mounting economic activity. 
Second, maintaining tax rates at present levels, and 
Third, keeping actual appropriations for the coming biennium 
within the budget here presented. 

FACTORS CONTROLLING THE SIZE OF THE TOTAL BUDGET 

Before discussing the items in this budget which show increases 
over the corresponding items of the current biennium, a few basic facts 
about the budget should be mentioned. 

First, the fixed charges, or continuing appropriations, represent 70 
per cent of the $552,570,000 total, or $385,700,000, of which $289,758,- 
000 is for distribution or subventions to the counties, cities, and other 
units of local government for schools, streets and roads, local fairs, and 
aid to the needy aged, the blind, and dependent children. 

Second, items subject to executive control comprise only 30 per 
cent of the budget. Aside from unemployment relief, reductions pos- 
sible in other controllable costs of State Government can not, in any 
case, be sufficient to offset the growth in mandatory charges experienced 
during recent years. 

Third, California is a rapidly growing State. The numerical 
growth in population during the last decade exceeded that of any other 
State of the Union. It is reasonable, therefore, to expect corresponding 
demands for expanded governmental services with resultant increases 
in governmental costs. 

Finally, we must take account of the fact that during the past 
quarter century the people have needed— demanded — and received 



9—18527 



122 



STATE PAPERS AND PUBLIC ADDRESSES 



many new, important and costly services at the hands of State Govern- 
ment. These services have contributed to and supported the general 
welfare. They have been evolved through our democratic processes. 
They are helping us to survive the impact of the machine age. Tiiey 
are easing our transition to a more rational social and economic order. 
They typify the evolution of government from a mere instrument of the 
police power used for the preservation of order, into an effective agency 
responsible to the collective needs and will of the people. This is the 
promise of American democracy which makes it strong and uncon- 
querable. 

FIXED CHARGES 

Fixed charges, over which the Governor can exercise no control, 
will increase $21,424,000 during the coming biennium, according to 
budget estimates. In other words, that increase is mandatory under 
provisions of our State Constitution and existing statutes. 

The largest item of mandatory costs is support of the public 
school system, which during the coming two-year period will require 
$160,070,000 or $4,680,000 more than the expenditure for this purpose 
during the current biennium. This increase is a product of our popu- 
lation growth. Elementary school enrollment has advanced during the 
current school year and will rise further as the increased number of 
children born in 1934 and 1935 reach school age. High school and 
junior college attendance is gradually mounting. Moreover, schools are 
being called upon to train workers for our National defense program. 

Expenditures for construction and maintenance of highways, 
county roads, and city streets — another fixed cost — will increase $9,470,- 
000 in the coming biennium to a new high total of $128,000,000. 
Nevertheless, those most familiar with the demands likely to be made 
upon our highway system believe that the present rate of investment in 
the traffic arteries of our State is inadequate. 

Aid to needy aged, blind, and children, a function of government 
much neglected in the past, is rapidly assuming major proportions. 
State payments required for assistance to these needy citizens will 
increase $7,600,000 in the 1941-1943 period, reaching a total of 
$49,750,000. 

Eequirements for debt interest and redemption will decrease in the 
next two years, due prineipallj^ to a reduction in interest charges on 
registered warrants. It is anticipated that the improvement in the 
State's financial position will enable retirement of all but a fraction of 
the $90,000,000 of General Fund warrants now outstanding, and that 
the interest rate, which has decreased significantly in recent months, 
may drop to a still more advantageous level under the impact of 
increasing revenue. It should be emphasized, however, that debt serv- 
ice is the only important item of fixed cost showing a decrease in the 
coming fiscal period, and that this reduction is more than offset by 
increases in the mandatory costs already mentioned. 

Other fixed charges, principally repre.senting State-collected reve- 
nue shared with local units of government, will increase $3,100,000, mak- 
ing up the remainder of the $21,424,000 in the unavoidable increases 
encompassed in the budget total. It may be unnecessary to observe that 
had there been no increases in fixed charges, the budget total for 1941- 
1943 would have been $531,100,000 instead of $552,500,000. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



123 



CONTROLLABLE EXPENDITURES 

Controllable expenditures of State Government may be divided 
into six functional groups : General government offices ; unemployment 
relief ; charitable and penal institutions ; the State university and State 
colleges ; regulation of motor vehicles ; and miscellaneous. 

In order to facilitate presentation of these budget data, I shall first 
discuss operating expenses of each group. 

Operating expenses are those incurred in the normal running of 
our State offices, departments, institutions, schools, and other agencies 
of general government. They include salaries and wages of State 
employees, expenditures for food and clothing for inmates of our State 
institutions and prisons, and services, supplies, and equipment required 
by governmental offices. 

In analyzing the State's operating expenses there is one large item 
common to all agencies; that is the allowance for salary adjustments. 
The budget- recommendations make full provision for these adjust- 
ments, in compliance with the expressed intention of the Legislature to 
recognize merit in its public servants, and to offer qualified persons an 
incentive for a career in public service. Governmental efficiency is 
promoted, and sound business principles prompt, the adoption and 
application of this policy. 

Section 70 of the State Civil Service Act, adopted in 1937, pro- 
vides that after one year in service, each employee shall receive an 
upward adjustment of salary equivalent to one of the intermediate 
steps in his salary range if his performance rating shall equal a required 
percentage fixed by the Personnel Board. Salary ranges provide, gen- 
erally, for four intermediate steps. Thus each efficient employee is 
entitled under the Civil Service Act to receive an adjustment of his 
salary at the end of each of his first four years of State service. Fur- 
thermore, the act provides that all agencies, in submitting budgetary 
requirements, shall carefully estimate and call attention to the need for 
moneys sufficient to provide for appropriate salary adjustments for the 
employees under their jurisdiction. To carry through the next bien- 
nium the adjustments given in the current two-year period, and to 
make the further adjustments due in 1941-1943, will require approxi- 
mately $5,000,000. This increase affects all State agencies and is 
included in the totals for the six functional groups itemized below. 

General State Offices, Boards, Commissions and Departments 

The function of general government, involving support of 13 State 
departments, 17 boards and commissions, 5 administrative offices, 
together with the legislative, executive, and judicial branches, will 
require .$48,500,000 for normal operating expenses during the 1941-1943 
biennium, under the recommendations I am making to you. Of this 
amount, approximately 45 per cent will be paid out of the State Gen- 
eral Fund, and 55 per cent from special funds — funds earmarked for 
specific purposes. The aggregate increase over the current biennium 
is $3,900,000. In recommending larger appropriations for general 
governmental agencies, I am recognizing the need for some additional 
funds by the State Department of Industrial Relations, the -State 
Railroad Commission, the State Board of Equalization, the Franchise 
Tax Commissioner, and certain other agencies. During the budget 



124 



STATE PAPERS AND PUBLIC ADDRESSES 



hearings for these and all other agencies, substantial reductions were 
made, and it is only on the basis of established need that increases have 
been included in my budget recommendations. 

Unemployment Relief 

Because of the upsurge of business and industrial activity in Cali- 
fornia, induced by large Federal expenditures for National defense 
and the training of Army and Navy personnel, unemployment in this 
State has been decreasing at a rate unhoped-for even 12 months ago. 
It is now anticipated that by the beginning of the next biennium, jobs 
will have been found for nearly all of those now on the relief rolls who 
are capable of holding skilled or semiskilled jobs, and that the relief 
load will then consist mainly of the unskilled, the physically handi- 
capped, and the seasonally unemployed. In this budget I have recom- 
mended an appropriation of $38,700,000 for unemployment relief for 
the entire next biennium, a reduction of $40,600,000 from the total for 
the current biennial period. You know, as I have so often stated, that 
I am convinced we should as speedily as possible, but without per- 
mitting want and suffering, discontinue the payment of ca.sh doles to the 
employable unemployed. Therefore, I sliall present for your considera- 
tion, legislation to provide that unemployment relief funds may be 
used to give employment to the unemployed, and to train the unskilled 
for jobs in industry. 

Hospitals, Homes, Prisons, Correctional Schools 

The institutions, prisons, and reform schools of this State will 
provide care and maintenance for an average of 39,200 persons each 
year of the next biennium. For this purpose I recommend appropria- 
tions totaling $28,650,000 or $4,460,000 more than for the 1939-1941 
period. In addition to salary adjustments and increa.'^es necessary 
for the growing number of patients and inmates, this increa.sed allot- 
ment for the institutions of our State also makes provision for progress 
in the work of these agencies. I am recommending that during the 
next biennium the State make full provision for the institution shortly 
to be opened at the .site of the State Narcotic Hospital, near Spadra, 
for the care and cure of chronic inebriates. The budget also contem- 
plates that new treatments for the mentally ill, which have proved 
highly successful in limited applications, will be extended. The 
recently developed methods of intensive treatment, such as insulin 
shock, which have produced recoveries in the vast majority of cases 
in which they have been used, must be utilized in all instances where 
there is a possibility of success. The research work now being con- 
ducted in the State mental hospitals will be extended through plac- 
ing into operation in January, 1942, the new Acute Psychiatric Hos- 
pital in San Francisco. While these improvements in the scientific 
handling of in.stitutional cases will necessitate larger expenditures 
in the next biennium, the State will benefit economically and socially 
by rehabilitating thousands of men and women now crowding our State 
hospitals and restoring them to society as normal and useful citizens. 

Educfltion, State Colleges, University, and Special Schools 

As all of you know, the University of California is one of the larg- 
est institutions of its kind in the United States in point of student 



MESSAGES TO THE LEGISLATURE— 1 94 1 



125 



enrollment, and the personnel of its instructing staff is unsurpassed. 
The State maintains seven State colleges, which are also recognized 
as foremost among educational institutions with high standards of 
instructions. The State also maintains two special schools for the 
deaf and blind, a merchant marine training academy and a poly- 
technic school, which are performing a splendid service in vocational 
education. Operation of these educational institutions, support of 
the State Department of Education, free textbooks, and other educa- 
tional activities will require an expenditure of $27,980,000 during the 
coming two-year period, over 95 per cent of which will be paid from 
the State General Fund. Expenditures for these educational func- 
tions will increase $2,800,000 over the total for this biennium, of which 
$1,500,000 is for the University of California. 

Regulation of Motor Vehicles 

A constitutional amendment adopted in 1938 sets aside all reve- 
nue received from motor vehicle fuel taxes and motor vehicle fees, with 
the exception of "in lieu" license fees, for expenditure on highway, 
road, and street work and the regulation of motor vehicles. Thus, the 
State Department of Motor Vehicles occupies a somewhat unique place 
in governmental structure. Although expenditures of this depart- 
ment are controllable, any saving made in regulation of motor vehicles 
must be expended on highways, roads, and city streets. Expenditures 
recommended for this function of government total $14,300,000 or 
$1,230,000 above the comparable 1939-1941 figure. 

Miscellaneous 

Miscellaneous controllable items, including the State Fair, Sixth 
District Agricultural Association in Los Angeles, flood control, tuber- 
culosis .subsidies, the Emersrencv Fund, and miscellaneous minor charges 
will require $6,600,000. These expenditures will be $1,200,000 less 
than for the current biennium. 

The increase in the operating expenditures for the State Govern- 
ment, exclusive of the $5,000,000 to carry salary adjustments will be 
about $6,000,000. This sum represents the increased cost of extending 
governmental services in the fields I have mentioned. 

CAPITAL OUTLAYS 

Capital outlays recommended in this budget include only those 
"must" items requiring immediate attention. There are many others 
which would be highly desirable and which should be undertaken at 
the proper time, but a large part of this work can be postponed until 
the housing needs of the State Government can be surveyed and a 
long-term building program formulated. In the meantime, provision 
should be made for the relatively minor outlays embraced in this budget. 

The State Government is badly in need of additional buildings. 
But whether we should enter upon a construction program at this time, 
in competition with the Federal Government's program of defense con- 
struction, is a question meriting your immediate and serious study. 
Present prospects are that economic activity within our State will 
reach new high levels during the coming two or three years. But the 



126 



STATE PAPERS AND PUBLIC ADDRESSES 



time will come when peace shall !\<xa'm prevail in the world. "We shall 
then have to face the probability that unemployment will again become 
as burdensome, as acute in all of its manifestations as ever before; 
perhaps more so. This prospect sngfrests that the actual commence- 
ment of an extensive public buildin? prosrram may well be postponed 
to provide work for those now engaged in preparedness industries. 
If we may judge from experience, an additional advantage of this 
policy will be the substantial economies resulting from lower prices of 
building materials. 

I am, therefore, recommending that the State undertake a study 
of its long-term building needs and that, so far as possible, provision 
be made to time the construction of public buildings and the perform- 
ance of public works to coincide with the work needs of our citizens. 
Appropriate legislation for such a program will be introduced for your 
consideration. 

THE state's financial POSITION 

With respect to the current financial position of the State Gov- 
ernment, I am pleased to report real improvement during the last year. 
The tax system of this State is quickly responsive to business condi- 
tions, and the industrial activity generated by the National defense 
progi'am has produced an extraordinary and iinpredicted rise in 
revenue collections. Although the General Fund deficit is estimated 
at $47,fi00.000 as of June 30. 1941, as compared with $36,500,000 in 
19.S9, this increase occurred entirely within the first year of the present 
biennium. Financial operations during the current fiscal year show 
income and expenditures in balance. 

A General Fund surplus of $11,000,000 is estimated for June 30, 
1943, but I must caution you that this surplus is entirely prospective 
and contingent. It is two and one-half years in the future. These 
estimates have been carefully prepared and every effort has been made 
to anticipate the course of future economic conditions. But events 
may change our Avhole outlook. In view of the uncertainties in present 
world affairs, every effort must be made to husband the financial 
resources of State Government with a view to creating a surplus in 
hand rather than a surplus in prospect. Periods of great economic 
activity have always generated a reaction. We can not expect defense 
activity to be an exception. When the last business boom ended in the 
market crash of 1929 and we entered upon a prolonged depression, the 
State of California had a General Fund surplus of over $30,000,000. 
With our present State budget approximately twice that of 10 years 
ago and a large percentage of the total tied up in fixed charges, there 
is even greater need for a reasonable surplus to cushion the shock of 
another depression. When we have accumulated such a surplus, we 
may then turn our attention to revising our State tax system and 
reducing the levies which now fall so heavily on those least able to pay. 
To that end, I invite your cooperation in holding special appropriation 
measures to the absolute minimum. 

This budget, as I have said before, is based upon what I believe 
to be the present requirements of our State Government. However, 
in the discharge of your duties as legislators, you will wish to deter- 



MESSAGES TO THE LEGISLATURE— 1 94 1 



127 



mine for yourselves the needs of each State agency. In carrying out 
this task, all departments of the State Government stand ready to 
extend to you every facility at their disposal. 

Respectfully submitted. 

CULBERT L. OLSON . 
Governor of California 



128 



STATE PAPERS AND PUBLIC ADDRESSES 



REAPPORTIONMENT 



State of California, Governor's Office 

Sacramento, April 1, 1941 

To the Honorable Members of the Senate 
Sacramento, California 

Greetings : I am pleased to inform yoii that I have received from 
the Clerk of the House of Representatives of the United States certifica- 
tion that T)ui*suant to Section 22, Subdivision (B), of the Act of Con- 
gress of the United States of America entitled "An act to provide for 
the fifteenth and subseqvient decennial censuses and to provide for 
apportionment of Representatives in Conorress," approved June 18, 
1929, as amended, by public numbered 481, Seventy-sixth Congress, 
approved April 25, 1940, that the State of California shall be entitled, 
in the Seventy-eighth Congress and in each Congress thereafter until 
the taking effect of a reapportionment under said act, as amended, or 
subsequent statute, to 23 Representatives in the House of Representa- 
tives of the Congress of the United States. 

I have caused to be filed with the office of the Secretary of State 
the original of this official document. 

Respectfully yours, 



CULBERT L. OLSON 
Governor of California 



MESSAGES TO THE LEGISLATURE— 1 94 1 



129 



MILITARY SERVICE 



State of California, Governor's Office 

Sacramento, April 10, 1941 

To the Honorable Members of the Assemhly 
Sacramento, California 

Greetings: I have just si<rned Assembly Bill No. 285 which grants 
leaves of absenee for Military Service to employees and officers, other 
than elective officers of counties and other public bodies. The Legis- 
lative Counsel has reported to me as follows concerning the bill : 

"Section 20 of Article lA^ of the Constitution provides in part 

that: ■ 

'No person holding any lucrative office under the United 
States, or any other power, shall be eligible to any civil office 
of profit under this State. ' 

This constitutional limitation appears to invalidate the pro- 
visions of this bill in so far, at least, as persons now holding offices 
in political subdivisions of this State are called into the armed 
forces of the United States and serve in such forces as officers. 

The courts have held that a military office is a lucrative office 
under the United States and as a matter of fact the historical 
background of this constitutional provision which was in the 
original Constitution adopted in 1849, indicates that one of the 
purposes in adopting it was to prevent the holding of State offices 
by officers in the Federal Military Force situated in California. 

A 'leave of absence,' does not imply a 'vacating' of the State 
office but rather a continued holding of the office even though dur- 
ing the period of leave the powers and duties are performed by 
some other person. 

In this connection we would call your attention to the method 
of approach to this problem as appears in Chapter 18 of the 
Statutes of 1941. This chapter amends the State Civil Service 
Act and provides in eifect that any civil service employee of the 
State who enters the Military Service 'shall have the absolute right 
to be restored to his former position ' upon the termination of that 
service. The procedure in that bill thus permits a resignation 
with an absolute right of reinstatement and so avoids the problem 
presented by Section 20 of Article IV of the Constitution. ' ' 

In view of the possibility that an officer or employee might rely 
upon the provisions of this bill and that it might later be declared to 
be in part unconstitutional, I believe that you should be informed of 
the views expressed above. I may also say that similar comments in 
regard to related legislation have been made by the Attorney General 
in his opinion No. N. S. 3078. 

Respectfully submitted. 



CULBERT L. OLSON 

Governor of California 



130 



STATE PAPERS AND PUBLIC ADDRESSES 



EMPLOYMENT OF NEWSBOYS 



State of California, Governor's Office 

Sacramento, May 3, 1941 

To the Honorahle Memhers of the Assembly 
Sacramento, California 

Greetings: I am retiirninpr herewith, without my signature, 
Assembly Bill No. 375, entitled "An act to add Sections 552.1, 1296.1 
and 1299.1 to the Labor Code, relating: to the sale or distribution of 
newspapers and other publications by minors." 

My ob.iections to this bill are as follows: 

Existing law of this State prevents the employment of children 
under the acre of 14 years durin? the school year and under the age 
of 12 years durino: the school vacations. There is no question that 
this prohibits the employment of children to sell newspapers or peri- 
odicals if they are under such ajres. HoAvever, it is contended that 
these laws do not prohibit the sellinjr of publications to boys over 10 
years of apre and such boys from spllin<r the same, on the theory that 
in such cases there is no employment, but that the boys are "little 
merchants" or independent contractors. The Department of Indus- 
trial Relations, which administers the laAvs prohibiting child labor, 
does not agrree with this contention, and for very sound reason. Con- 
trary to an opinion issued from the Office of the Attorney General, 
which is in conflict with a previous opinion from that office, the Depart- 
ment of Industrial Relations contends that the provision of Section 
1.220 of the School Code which says "no person, firm or corporation 
shall employ, suffer or permit any minor under the agre of 16 years 
to work" without a permit as provided in the code, and a similar 
provision in the Labor Code, means that newsboys, as well as other 
minors, shall not be suffered or permitted to work without such permits, 
whether they are called "little merchants" or not. The School Code 
does not allow the issuance of permits to children under 14 years of 
apre to work durinpr the school year or to those under 12 years of aore 
during!: the vacations or on school holidays. A test case will undoubt- 
edly come before the courts to settle this question. 

This bill would reduce to 10 years the ajre at which children would 
be allowed to sell newspapers and periodicals. The bill provides that 
a boy over 10 years of age may sell or distribute newspapers, periodi- 
cals or circulars without receiviufr any consent from the Labor Com- 
missioner or any school work permit from the school authorities. The 
bill does provide that when a minor is first supplied with newspapers 
or periodicals, the person so supplyinpr him shall jrive written notice 
thereof to the person now authorized to issue school work permits under 
existing law, and to give a card containing the notice to the minor or 
his parent or guardian, but the bill does not provide for the issuance 
of any school or Labor Commissioner's permit. 

The bill further provides that the person notified is in turn 
required to notify the minor's school principal, who is then required 



MESSAGES TO THE LEGISLATURE— 1 94 1 



131 



to check the minor's health and school record. Whenever either of 
the latter is certified by the school physician or other school authority 
to be adversely affected by the minor's outside work, a certificate to 
that effect is required to be delivered to the minor's parent or guardian 
and to the person who supplied the newspapers, periodicals or circulars. 
If the parent or guardian fails to have the minor cease working within 
five days, the person supplying him with papers, etc., must cease 
doing so. 

I am convinced that those provisions of this bill in practical 
operation would supply little, if any, protection to the child. As for 
the protection afforded by the requirement that the consent of the 
parent be obtained, that, it is regrettable to state, in many instances 
would afford no protection. All Child Labor Laws have been enacted 
because parents from economic necessity or demoralization have per- 
mitted their children to do work dangerous to their life, destructive 
of their health or injurious to their moral well being. The working of 
children of tender years in the mines, mills and factories, which is now 
prohibited in most States, was done with the consent of parents. 

Under this bill no permit of any kind is required. The minor is 
given the papers to sell, and unless affirmative action to prevent it is 
taken by the school authorities, according to the impractical procedure 
specified in the bill the child can continue to sell papers. It is likely 
that with the difficulties placed in his way by this bill a school principal 
could not effectively prevent this kind of child labor where it should 
not obtain. Assuming that school principals should feel free to tell 
the parent or the publisher this or that child must stop the work he is 
doing, I do not believe that the cursory examination that the principal 
could give the child's health and school record under this bill would 
afford sufficient insight into whether the child was being harmed by 
the work. A large number of things could injure the child for the 
rest of his life which would never show on the school records. They 
would not show the harm done by his trudging in and out of saloons, 
beer halls and places of prostitution or his away-from-home associations 
with undesirable persons. They do not show, and they will not protect 
him from the dangers of traffic into which his immature judgment and 
discretion may lead him. 

I am well aware that there are times and places when and where 
children of not too tender years may sell newspapers without injury 
and even with benefit to themselves, but such employments may occur 
under the administration of the present school and labor codes. 

Without going into further detail, I must say that the provisions 
of this bill seem to be regressive and wholly ineffective to protect 
children. The people of the State of California have been proud of 
the success of their efforts to safeguard women and children in industry, 
as well as of the progressiveness of our laws for the protection of all 
people who labor. If our legislation on these subjects should prove to 
be invalid or ineffective, we should not enact cumbersome, impractical 
or weak measures to supplant them, but we should enact measures which 
will clearly and effectively extend the needed protection. If there is 
a doubt as to whether children employed in selling newspapers and 
periodicals are not fully protected by existing Child Labor Laws, on 



132 



STATE PAPERS AND PUBLIC ADDRESSES 



the theory that they are independent contractors, the law should be 
amended to specifically include them and remove that doubt. 

The experiences of those who have studied child labor and child 
labor legislation throughout the Nation has sho^vn that, in addition to 
rigid prohibitions against children of tender years engaging in labor, 
the laws should establish a system whereby the school authorities issue 
permits to those children who should be alloAved to work, so that the 
check as to age, consent of the parent, nature of the occupation, and 
the effect on the child could be made before the child is permitted to 
work. 

Aside from the fact that this bill would prevent the enforcement 
of laws now on our statute books which seem adequate and substitute 
a law establishing the policy that children over 10 years of age should 
work and providing no effective method for their protection, a serious 
question of ambiguity arises under this bill. From the use of the word 
"hereafter" in the first sentence of Section 3, the bill, literally read, 
is easily susceptible of an interpretation that its provisions would not 
affect minors already engaged in selling newspapers or periodicals. 
Such interpretation could follow from the fact that this is a criminal 
statute, which must be strictly construed. I am sure that it was not 
the intent of the Legislature to so limit the effect of the bill, but from 
the face of the bill, as I have said, it could be so interpreted. 

Respectfully submitted. 



CULBERT L. OLSON 

Governor of California 



MESSAGES TO THE LEGISLATURE— 1 94 1 



133 



ALIEN DOCTORS 



State of California, Governor's Office 

Sacramento, May 19, 194J 

To the Honorable Members of the Assembly 
Sacramento, California 

Greetings : I am returning herewith without my signature, Assem- 
bly Bill No. 1475, entitled "An act to amend Section 2193 of the 
Business and Professions Code, relating to applications for a physi- 
cian's and surgeon's certificate by graduates of foreign medical 
schools. ' ' 

My objections to this bill are as follows: 

This bill adds to Section 2193 of the Business and Professions 
Code, which sets forth the evidence which an applicant to take an 
examination for a license as a physician and surgeon must furnish if 
his application is based on a diploma issued to him by a foreign medi- 
cal school approved by the Board of Medical Examiners, except a 
Canadian school, the requirement that he must furnish evidence that 
"If the applicant is not a citizen of the United States, the 
country in which he has been licensed to practice medicine and 
surgery will admit to practice therein citizens of the United States 
upon proof of prior admission to practice medicine and surgery 
in some State of the United States or upon proof of matters similar 
to those required in this section for graduates of foreign medical 
schools. ' ' 

The bill also provides that this requirement shall not apply to any 
person who, on March 31, 1941, was registered as an interne under 
Chapter 5 of Division 2 of the Business and Professions Code. 

Only a very few, if any, foreign countries admit citizens of the 
United States to practice medicine, and so the practical effect of this 
bill would be that it would exclude any person from taking an examina- 
tion for a license to practice medicine in this State who was not a 
citizen of the United States, unless he was registered as an interne 
before March 31, 1941. The bill, therefore, is in effect identical with 
Assembly Bill No. 449 of the 1939 Session of the Legislature, which was 
refused executive approval. 

Practically all of the physicians who, within the next few years, 
may wish to qualify for licenses to practice medicine under the existing 
provisions of California laws, will be men or women forced to flee from 
their homes because of their race or because their political beliefs differ 
from those of the persons who now control most of Europe. Thej' will 
be persons who are lawfully admitted to the United States and who 
will wish to earn their livings by practicing the profession for which 
they spent years of preparation and in many cases in which they spent 
years of practice. Some of them may be persons renowned in the prac- 
tice of medicine. Under existing laws, before such persons can take 
the examination which the graduates of American, Canadian or foreign 



134 



STATE PAPERS AND PUBLIC ADDRESSES 



schools must take in order to receive a license in this State, each such 
person must show that : 

(a) He has completed a resident course of professional 
instruction in an approved medical school or schools equivalent 
to that required for a phj^sician and surgeon applicant who is a 
citizen. 

(b) Subsequent thereto, he has had issued to him by an 
approved medical school, a medical diploma, as evidence of the 
completion of the course of medical instruction required of a 
citizen applicant. 

(e) He has been admitted or licensed to practice medicine 
and surgery in the eountrj- wherein is located the institution in 
which he has completed the resident courses of professional 
instruction required under (a) and (b). 

(d) He has completed either the senior or fourth or final 
year in an approved medical school in the United States, or in lieu 
of this, that he has served at least one year in residence in a hospi- 
tal located in the United States and approved by the board for 
training of internes. 

Several days ago, I approved Assembly Bill No. 503, which 
became Chapter 220 of the Statutes of 1941, which amended our laws 
so that a foreign physician or surgeon will not hereafter be given the 
credit of 1 per cent upon his general average in the California exami- 
nation for each year of actual licensed practice since his graduation, 
which credit is granted to physicians who have practiced in other 
States of the United States or in Canada who wish to pi-actice in Cali- 
fornia. In other words, a foreign physician must have the equivalent 
of all the educational requirements of the graduates of United States 
approved medical schools, he must take the same examination, and pass 
with the same required grades, after having served a year as an interne 
in a United States hospital or completed either the senior or fourth 
or final year in an approved medical school of the United States. There 
seems no good reason at this time why, in addition to these require- 
ments, he must be a citizen of the United States. 

As I have said, most of the foreign physicians who will apply for 
licenses will be persons who have been forced to flee from their own 
countries, that is, refugees. They obviously will not have the five-year 
residence in the United States which is required before they can 
become citizens. It was doubtful if any of them have been or will be 
allowed to escape to America with any money or other possessions. 
Why shouldn't they be allowed to earn their livings by practicing 
medicine, if by our own standards we believe they are competent to 
do so? It would seem to be a needless waste of human knowledge and 
experience to require them to wait five years during which they would 
have to forego the practice of their profession. It is possible that a 
trained physician who would be obliged to enter into other occupations 
for five years could never resume the practice of his profession, and 
this would be a still greater waste of human services. I do not think 
that we should thus deal with human beings, especially those who have 
just undergone the pain of being driven from their homes, the asso- 
ciation of their friends, and being stripped of their possessions. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



135 



I am told by some that we must put up this bar in order to protect 
California physicians; that is, they state that the profession is now 
overcrowded in California. Yet, on the other hand, I hear reports of 
the dearth of medical services for those who need them and of an 
impending scarcity of physicians because of National defense needs 
and I have lately been requested to do all I could to help secure an 
exemption of medical students from the Selective Service program on 
the ground that there will soon be a scarcity of physicians and that we 
must hasten the training of students to fill the defense needs for physi- 
cians. Between these conflicting claims of a shortage of physicians and 
the possibility of overcrowding of the profession, if we must err, it 
should be on the side of making the services of these additional physi- 
cians available. I have no sympathy for the alien who comes to 
America and partakes of the benefits of our country and way of living 
and who refuses to become a citizen and share in the duties and respon- 
sibilities oi citizenship, but I do not think that at this time we should 
add the requirements of citizenship to the other requirements of a 
physician. 

If one looks at this bill as simply a reciprocity statute, aimed to 
force other countries to open tlieir doors to American physicians, it 
takes little consideration to reach the conclusion that at this time 
under the present condition of world affairs such a statute would be 
absolutely fruitless. In the first place, very few American physicians 
at this time wish to go abroad to practice their profession. Assuming, 
however, that thej^ should wish to do so, can any one imagine that the 
rulers of Europe will permit American physicians to practice there, 
because unless they do so, the refugee physicians cannot practice in 
the State of California until they have .stayed here five years and 
become citizens? In a peaceful world, it is conceivable that a recip- 
rocity statute as to foreign countries might work in the same manner 
that the reciprocity statutes work among the States of the United 
States, so that a physician, as long as he was competent, might use his 
services wherever there was need for them, but it is doubtful if such 
reciprocity statutes will work internationally. Therefore, even if the 
laws of some countries do not permit American physicians to practice 
in such countries, should we model our laws after theirs; do we have 
to retaliate? It surely is not within our American traditions to accept, 
the rulings of other nations as models of our own, and no purpose 
would be served at this time by enacting a reciprocity statute such as 
this is assumed to be. 

Lastly, if it is believed that a reciprocity statute is necessary in 
order to open up to American physicians the way to practice in other 
countries, then such a reciprocity statute should be drafted so that the 
physicians from other countries will be admitted in California on 
exactly the same basis that California physicians are admitted in those 
countries. A plain reading of this bill shows that it does not do this. 
Instead, it places a higher standard for the foreign physicians than 
we should have the foreign country establish for California physicians. 
Section 2193 of the Business and Professions Code sets forth the 
requirements an applicant must have before he will be allowed to take 
the examination in California. Under the bill the applicant must show 
that "the country in which he has been licensed to practice medicine 



136 



STATE PAPERS AND PUBLIC ADDRESSES 



will admit to practice therein citizens of the United States upon 
proof of" 

(1) Prior admission to practice in some State of the United 
States, or 

(2) Matters similar to the requirements of Section 2193. 

California does not admit to practice an applicant from a foreign 
State upon proof of matters required in Section 2193, it only permits 
him to take an examination, so this bill would result in a statute which 
would not be truly reciprocal. Such may not have been the intention 
of the proponents of this bill, but this interpretation follows from the 
wording of the bill. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 



MESSAGES TO THE LEGISLATURE— 1 94 1 



137 



HOT CARGO AND SECONDARY BOYCOTT 



State op California, Governor's Office 

Sacramento, May 27, 1941 

To the Honorahle Mevxlters of the Senate 
Sacramento, California 

Greetings : I am returning herewith, without my signature. Senate 
Bill No. 877, entitled: "An act to add Chapter 8, comprising Sections 
1131, 1132, 1133, 1134, 1135 and 1136 to Part 3, Division 2 of the 
Labor Code, relating to hot cargo and secondary boycotts." 

My objections to this bill are found in the provisions of the Con- 
stitution of 'the United States and of the State of California, and in my 
oath of office to support them. 

According to my understanding of those provisions and their inter- 
pretation by the Supreme Court of the United States and the Supreme 
Court of this State, I could not approve this bill without violating that 
oath. 

"Hot Cargo" declared by this bill to be unlawful is defined to 
mean "any combination or agreement resulting in a refusal by employ- 
ees to handle goods or to perform any services for tlieir employer 
because of a dispute between some other employer and his employees 
or a labor organization or any combination or agreement resulting in a 
refusal by employers to handle goods or perform any services for 
another employer because of an agreement between such other employer 
and his employees or a labor organization." 

"Secondary Boj^cott" also declared by this bill to be unlawful is 
defined to mean "Any combination or agreement to cease performing 
any services for any employer or to cause any loss or injury to such 
employer, or to his employees, for the purpose of inducing or compell- 
ing such employer to refrain from doing business with, or handling 
the products of any other employer, because of a dispute between the 
latter and his employees or a labor organization, or any combination or 
agreement to cease performing or to cause any employer to cease per- 
forming any services for another employer, or to cause any loss or 
injury to such other employer, or to his employees, for the purpose of 
inducing or compelling such other employer to refrain from doing 
business with, or handling the products of any other employer, because 
of an agreement between the latter and his employees or a labor organi- 
zation. ". 

In other words, this bill declares it unlawful for employees by 
agreement among them to cease work for an employer if that refusal is 
because of a dispute between another emploj-er and his employees, and 
declares it unlawful for employees to cease work for any employer for 
the purpose of inducing such employer to refrain from doing business 
with or handling the products of any other employer because of a dis- 
pute or an agreement between the latter and his employees, regardless 
of their interest in or what may be the effect of any such circumstance 
upon their rights and the rights of other employees to accomplish 



10—18527 



138 



STATE PAPERS AND PUBLIC ADDRESSES 



effective collective bargaining; and, as stated by the Legislative Coun- 
sel in his report, the language of the bill defining "secondary boycott" 
clearly includes peaceful picketing as being unlawful unless narrowly 
limited to a place wliere there is a direct employer-employee relation- 
ship. 

The Supreme Court of the United States has held such laws uncon- 
stitutional in that they violate rights guaranteed by the First and Four- 
teenth Amendments to the Constitution of the United States; rights 
which are also guaranteed hy Sections 9 and 10 of Article I of the 
Constitution of California. The Legislative Counsel's opinion says: 
"The action of the United States Supreme Court in these two 
cases is persuasive to the effect that fi-eedom of speech is not to be 
limited by a State's declaration of whether its purpose is lawful. 
It seems to be the court's view that peaceful picketing is identified 
with the constitutional guaranty of free speech and is to be judged 
according to the principles governing the exercise of that right. 
It can not be narrow! restricted by a State's declaration of what 
it deems to be the proper field for its exercise. It seems to us that 
in broadly outlawing secondary picketing, whether peaceful or not, 
S. B. 877 goes too far and is unconstitutional in that respect." 
(Citing American Federation of Labor v. Swing (1941), 61 Sup- 
reme Court 568; Journeymen etc. v. Miller's, Inc. (1941), 61 
Supreme Court 732.) 

I am keenly and sympatheticallj- aware of the feelings of individual 
employers who feel that instances in the operation of the secondary 
boj'cott or "hot cargo" pressure of organized employees of another 
employer unjustly affect and injure their own normal operations, 
because they are not directly parties to that other employer's dispute 
with his employees. 

But the answer to this complaint is found in the following language 
of the Supreme Court of California, 100 Cal. Dec, p. 407: 

"although the respondent argues that a person secondarily boycot- 
ted is an innocent third party caught between the upper and lower 
millstones of an industrial dispute in which he has no interest, this 
is clearly not correct. One who sells a product of a merchant or 
manufacturer who is engaged in a labor dispute with his employ- 
ees, inescapably becomes an ally of the employer. He has a direct 
unity of interest with the one being struck. By providing an outlet 
for that product, he enables the emplo.yer to maintain the working 
conditions against which labor is protesting. And unless the 
union is allowed to follow the pi-oduct to the place where it is sold 
and to ask the public by peaceful representations to refrain from 
purchasing it, the workers have no i-eal opportunity to tell their 
story to those whose interest or lack of interest will, in large 
measure, determine the issues in dispute. (Goldfinger v. Feinbuch, 
276 N. Y. 281, 11 N. E. (2d) 910.) " 

It is inevitable, in the maintenance of the civil liberties of our 
democracy involved in the economic struggle in the field of industry and 
commerce where workers and employers exercise their collective eco- 
nomic power for the attainment of what they consider to be their just 



MESSAGES TO THE LEGISLATURE— 1 94 1 



139 



rights, that incidental hardship may be suffered by individuals only 
indirectly involved and which they are powerless to prevent. But 
fundamental Constitutional rights and civil liberities which our coun- 
try is now preparing to defend against the enemies of democracy can 
not be set aside in order to avoid those incidental hardships. The way 
must and undoubtedly will be found in adjustments which will neces- 
sarily evolve from the preservation of those rights. 

Everyone, even the proponents of this bill, will agree that the 
right of employees to unionize and to strike and to peacefully picket in 
the enforcement of their rights to bargain collectively are just and 
fundamental rights of our American system ; yet this bill would destroy 
the effective, peaceful and orderly exercise of those rights. In fact, it 
goes further and denies the right of employees to quit work for any of 
the reasons mentioned in the bill. It says continuance at work under 
such circumstances is compulsory. I have not found any statute or 
ordinance of any state or municipality which has ever gone so far in 
attempts to defeat or circumscribe the rights of organized workers. 
This bill says to a union of workers engaged in an economic struggle 
with their employer to better their wages or working conditions, "You 
can not ask other employees to assist you in your struggle." And it 
says to a union of other employees, "You must continue to work on 
materials furnished by another plant in which that struggle exists, and 
you may be sent to jail if you fail to continue at work on those mate- 
rials, although by so doing you will aid in destroying your own union." 
(254 U. S. 443.) 

I believe that most Americans, without looking at any law books, 
would say that under our American system of government and the 
rights guaranteed by our Constitution, if a man does not want to work, 
he can not be made to do so whatever his reasons ; that he can use this 
right to quit work for any reason he sees fit, either individually or col- 
lectively; that is, he can quit his job alone, or he can walk out with 
other employees of a similar mind. 

So analyzed, I believe the average American will agree that no mat- 
ter what the purpose, or how some people may have abused their right 
to quit work or to strike, you can't make a free man work in private 
enterprise, and that therefore such a bill as this would violate our 
fundamental rights of liberty and freedom from involuntary servitude. 

In the case of Thornliill vs. Alabama, 60 Supreme Court Reports 
7.36, is the final and conclusive determination by our highest court of 
the unconstitutionality of a bill such as this. In that case the court 
held as follows (pages 744-5) : 

"The freedom of speech and of the press guaranteed by the 
Constitution embraces at the least the liberty to discuss publicly 
and truthfully all matters of public concern without previous 
restraint or fear of subsequent punishment. . . . 

"In the circumstances of our times the dissemination of in- 
formation concerning the facts of a labor dispute must be regarded 
as within that area of free discussion that is guaranteed by the 
Constitution. Hague v. C. /. 0., 307 U. S. 496, 59 S. Ct. 954, 83 
L. Ed. 1423 ; Schneider v. State, 308, U. S. 147, 155, 162, 163, 60 
S. Ct. 146, 151, 84 L. Ed. __. See Senn v. Tile Layers Union, 301 
U. S. 468, 478, 57 S. Ct. 857, 862, 81 L. Ed. 1229. It is recognized 



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STATE PAPERS AND PUBLIC ADDRESSES 



now that satisfactory hours and waj^es and working conditions in 
industry and a bargaining position which makes these possible have 
an importance which is not less than the interests of those in the 
business or industry indirectly concerned. The health of the 
present generation and of those as yet unborn may depend on 
these matters, and the practices in a single factory may have eco- 
nomic repercussions upon a whole region and affect widespread 
systems of marketing. The merest glance at State and Federal 
legislation on the subject demonstrates the force of the argument 
that labor relations are not matters of mere local or private con- 
cern. Free discussion concerning the conditions in industry and 
the causes of labor disputes appears to us indispensable to the 
effective and intelligent use of the processes of popular Government 
to shape the destiny of modern industrial society. The issues raised 
by regulations, such as are challenged here, infringing upon the 
right of employees effectively to inform the public of the facts of 
a labor dispute are part of this larger problem. We concur in the 
observations of Mr. Justice Brandeis, speaking for the Court in 
Senn's case (301 U. S. at page 478, 57 S. Ct. at page 862, 81 L. Ed. 
1229) : 'Members of a union might, withovit special statutory 
authorization by a State, make known the facts of a labor dispute, 
for freedom of speech is guaranteed b}' the Federal Constitution. ' ' ' 

In the case of American Federation of Labor v. Sivinq, Justice 
Frankfurter placed even greater emphasis upon the inviolability of the 
right of "peaceful picketing of peaceful persuasion" in the following 
language, which in my opinion is determinative that this bill is uncon- 
stitutional : 

"We are asked to sustain a decree which for purposes of this 
case asserts as the common law of a State that there can be no 
"peaceful picketing or peaceful persuasion" in relation to any 
dispute between an employer and a trade union unless the em- 
ployer's own employees are in controversy with him. 

"Such a ban of free commuiiieation is inconsistent with the 
guarantee of freedom of speech. That a State has ample power to 
regulate the local problems thrown up by modern industry and to 
preserve the peace is axiomatic. But not even these essential pow- 
ers are unfettered by the requirements of the Bill of Rights. The 
scope of the Fourteenth Amendment is not confined hy the notion 
of a particular State regarding the wise limits of an injunction in 
an industrial dispute, whether those limits be defined by statute or 
by the judicial organ of the State. A State can not exclude work- 
ingmen from peacefully exercising the right of free communication 
by drawing the circle of economic competition between employers 
and workers so small as to contain only an employer and those 
directly employed by him. The interdependence of economic in- 
terest of all engaged in the same industry has become a connnon- 
place. American Foundries v. Tri-City Council, 257 U. S. 184, 
209. The right of free communication can not therefore be muti- 
lated by denying it to workers, in a dispute with an employer, even 
though they are not in his employ. Communication by such em- 
ployees of the facts of a dispute, deemed by them to be relevant 



MESSAGES TO THE LEGISLATURE— 1 94 1 



141 



to their interests, can no more be barred because of concern for the 
economic interests against which they are seeking to enlist public 
opinion than could the utterance protected in Thornhill's case. 
"Members of a union might, without special statiitory authoriza- 
tion by a State, make known the facts of a labor dispute, for free- 
dom of speech is guaranteed by the Federal Constitution." Senn 
V. Tile Layers Vnion, 301 U. S. 468, 478." 

Since the United States Supreme Court handed down these and 
like decisions. State courts of last resort in several States have reversed 
their former decisions in conflict therewith. 

In the case of E. L. Kerns Co. vs. Landgraf et al., decided by the 
New Jersey Court of Errors and Appeals on December 12, 1940, the 
court held that it was lawful for the union to distribute circulars and 
cards am(5ng customers, and prospective customers of the employer, 
informing them that such employer's products were nonunion made. 

The court in that case reviewed the various decisions of the United 
States Supreme Court on the subject, and upheld the right of a iniion 
to compete with nonunion concerns by means of informing the public 
that such concerns were producing goods made by nonunion workers. 
In that connection the court had the following to say: 

"If a merchant may freely, fairly, honestly and peacefully 
compete with other merchants, as is the common daily practice, 
'by means of advertisements in the press, (or) by circulars, or by 
his window display' or by radio, so a union may in like manner, 
here by circulars, compete with nonunion concerns for customers. 
Such competition violates no rule of common law or otherwise; 
nor does it trench iipon any provision of either our State or F?d- 
eral Constitution. Cf. F^enn v. Tile Lmicrs &c. Union, 301 U. S. 
468, 482. 81 L. Ed. 1229, 1238. fFor the right generally to dis- 
tribute circulars see, Lnvell v. Griffin. 303 U. S. 444, 82 L. Ed. 949; 
Schneider v. Nnv Jersey, 308 U. S! 147 (5 LIJR Man. 659) ; McLean 
v. MacJcay, 124 N. J. L. 91, 10 A. 2d 733). If injury results from 
the stated competition it is damnum ahsque injuria. 

"(Free Speech and Press) 

"Additionally, we are of the opinion, and so hold, that, under 
the circumstances exhibited in the instant case, the restraint 
imposed constitutes an infringement of the union's right of freedom 
of speech and freedom of press both under our State and Federal 
Constitutions, notwithstandinir the fact that there was no strike 
nor dispute between complainant and its employees. For an 
analogy in principle compare, Thornhill v. Alaiama, supra; Carl- 
son v. Shasta County, California, Adv. Opinions, U. S. Sup. Ct. 
Vol. 84, No. 13, p. 668 (6 LRR 318)." 

The Kentucky Court of Appeals in the recent ease of Stanford et 
al. v. Press Puhlishinr/ Company, decided February 28, 1941, held 
secondary boycott as lawful and as an exercise of constitutional right 
of freedom of speech and of the press. It reviewed the recent decisions 
of the Supreme Court on the subject and held in effect that the U. S. 



142 



STATE PAPERS AND PUBLIC ADDRESSES 



Supreme Court being the final interpreter of the Federal Constitution 
the State court must follow its decisions. In this connection it held : 
"Since the Supreme Court is the final interpreter of the Fed- 
eral Constitution, no distinction may hereafter be drawn by a state 
court between the acts which may be committed by employees in 
furtherance of their interests and those which may be committed 
by nonemployee members of a labor union in the furtherance of 
its interests. Hence, members of any labor union, so long as they 
refrain from acts of violence, may not be enjoined from picketing 
the premises of any person against whom the union has a griev- 
ance, or from conducting a boycott against his business, notwith- 
standing the consequences to him, his accord with his own employ- 
ees, or his inability to grant the demands made upon him by the 
union. 

"Since the appellants are members of bona fide labor unions, 
and, in attempting to compel the unionization of appellee's print- 
ing establishment, did not resort to acts of violence, it is wholly 
immaterial that by advertisements and personal interviews in which 
the facts were stated and consequences intimated, they induced 
many of appellee's patrons to withhold their patronage. Appel- 
lants were exercising rights guaranteed to them by the Constitu- 
tion and construed by the Supreme Court and lesser coui-ts are 
powerless to afford appellee any relief. ' ' 

The last expression of the Supreme Court of California on the sub- 
ject is the ease of McKay v. Retail Automobile Salesmen's Union, 100 
Cal. Dec. 347. The Supreme Court in that case reviewed nearly all 
of the previous decisions of that court, pointing out that workmen may 
associate together and exert various forms of economic pressure upon 
employers. It held (at page 352) as lawful the right to strike, to 
boycott, primarily and secondarily, and to picket, using the following 
language and references: 

"Concerning the means used, it must be taken as settled in 
this State, that workmen may associate together and exert various 
forms of economic pressure upon employers, provided they act 
peaceably and honestly. The conventional means of exerting this 
economic pressure which have been held lawful are the strike 
(Pierce v. Stablemen's Union, (1909) 156 Cal. 70; Parkinson v. 
Building Trades Council, (1908) 154 Cal. 581; So. Calif. Iron & 
Steel Co. V. Amalgamated Assn., (1921) 186 Cal. 604; Lissc v. Local 
Union, (1935) 2 Cal. (2d) 312) ; the boycott, both primary and 
secondary (Parkinson v. Building Trades Council, supra ; Pierce 
V. Stablemen's Union, supra; So. Calif. Iron & Steel Co. v. Amal- 
gamated Assn., supra) ; and the picket (Lisse v. Local Union, 
supra; In re Lyons, 27 Cal. App. 182)." 

The right to picket was held by the court in that case as one guar- 
anteed by the Constitution as an incident of freedom of speech. In 
that connection the court said further (page 352) : 

"It is true that the early cases in the state intimated that 
picketing in any form was illegal (Rosenberg v. Retail Worker's 
Assn., 39 Cal. App. 67 (1918) ; Pierce v. Stablemen's Union, 



MESSAGES TO THE LEGISLATURE— 1 94 1 



143 



supra), and that Moore v. Cook's Union, 39 Cal. App. 538, held 
that peaceful picketin": was per se unlawful. However, those con- 
clusions were expressly renounced by this court in Lixae v. Local 
Union, supra. Indeed, the modern trend of decision clearly indi- 
cates that the rijrht to picket peacefiilly and truthfully is one of 
orfranized labor's lawful means of advertising: its o-rievances to the 
public, and as such is fjuaranteed by the Constitution as an inci- 
dent of freedom of speech. {Carlson v. California, 84 L. Ed. 668 
(1940) ; TJiornhill v. Alabama, 84 L. Ed. 659 (1940; In re Lvons 
supra (1938) ; P€07^le v. Harris, 91 Pac. (2d) 989 (Colo. 1939) ; 
48 Yale L. J. 308, 312 (1938).) But the law clearly requires that 
concerted action by union workers be peaceful. Acts of violence 
or 'acts amoimtinp- to phvsical intimidation' will be enjoined. 
(Goldberg cfc. Co. v. FIfablcmcn's Union, 149 Cal. 429 (1906) ; 
So. Calif. Iron S Stfrrl Co. v. Amalgamated Assn., supra; Lisse v. 
Local Union, supra.)" 

In the case of In re Lyons, 27 Cal. App. (2d) 293, the first expres- 
sion was made by our Appellate Court that the right to picket was a 
constitutional richt that could be exercised not only by employees 
but by anyone else. In that case the rifjht of citizens to picket the 
market because it would not close on Sundays was upheld. The court 
upheld this universal rifjht of picketing in the following language: 

"We can not see how the right to peacefully picket, under 
the guaranty of free speech, could be confined to cases in which 
there exists a dispute between an employer and organized labor 
over hours or conditions of employment of nonunion men and not 
extended to a dispute between a business man and any citizen or 
group of citizens who may differ with him on a question of busi- 
ness policy. The guaranty of the right of free speech is general 
and extends to every class or group of citizens." 

The right of boycott and picketing, being a Constitutional right, 
can not be enjoined by any legislative enactment. 

It should be pointed out that this attempt to restrict this funda- 
mental constitutional right is only limited to the activities of workers 
and labor organizations, or persons who would assist them. As such, 
it is class legislation. The bill makes it unlawful for an employee to 
refuse to handle goods because of a di.spute between another employer 
and his employees, or a labor organization. The same employee would 
have the right to refuse to handle goods because it was produced by 
slave labor, child labor, or undt-r any other circumstance which that 
person thought in the liglit of his reasoning and his conscience was 
wrong, and as .such, to be discouraged. 

The bill makes it unlawful for a person to bring economic pressure 
on an employer in an effort to induce such employer to refrain from 
doing business with, or handling the products of any other employer 
because of a dispute between the latter and his employees, hnt would 
permit any group of citizens to exercise the same economic coercion on 
that employer because he sells Japanese goods. 

The proponents of the bill seem oblivious to the fact that there is 
a unity of interest among all workers. This fact was recognized by 
Justice Taft years ago in the case of American Foundries vs. Tri-City 



144 



STATE PAPERS AND PUBLIC ADDRESSES 



Central Trades Council, 257 U. S. Supreme Court Reports (at p. 209), 
in the following language : 

"Labor unions are recoenized by the Clayton Act as legal 
when instituted for mutual heln and laAvfully carrying out their 
legitimate objects. They have long been thus recognized by the 
courts. They were organized out of the necessities of the situa- 
tion. A single employee was helpless in dealing with an employer. 
He was dependent ordinarily on hi.s daily wage for the mainte- 
nance of himself and family. If the employer refused to pay him 
the wages that he thought fair, he wa.s nevertheless unable to leave 
the employ and to resist arbitrary and unfair treatment. Union 
was essential to give laborers opportunity to deal on equality 
with their employer. Thev united to exert influence upon him 
and to leave him in a body, in order, bv this incouA'cnience. to 
induce him to make better terms with them. They were with- 
holdinsr their labor of economic value to make him pay what they 
thought it wa.s worth. The right to combine for such a lawful 
purpose has. in manv years, not been denied by any court. The 
strike became a lawful economic strucrgle or competition between 
employer and employees as to the share or division between them 
of the .ioint product of labor and capital. To render this combina- 
tion at all effective, emplovcps must make their combination extend 
beyond one shop. It is helpful to have as many as may be in the 
same trade in the same community united, because, in the com- 
petition between eniplover.s. they are bound to be affected by the 
standard of was-es of their trade in the neighborhood. Therefore, 
they may use all lawful propaganda to enlarge their membership, 
and especially among tho.se whose labor at lower wages will injure 
their whole guild." 

They overlooked the fact that the standard of wages and working 
conditions prevailing in one plant, or locality, may be seriously jeopar- 
dized by the payment of lower wages by another employer, and espe- 
cially is this true if it is in the same indu.stry. Workers receiving fair 
wages from employers who want to maintain the American standards 
of living are duty-bound to protect themselves and that employer from 
the unfair competition from other chiseling and cut-throat competitors, 
by means of boycott and picketing. 

To hold otherwise, and to compel a worker, or an employer from 
exercising his fundamental right to purchase, or work on any material 
which they feel would seriously jeopardize the employer'.s business, and 
the standards of wages and working conditions e.stablLshed in his busi- 
ness, would be to compel such employer and his employees to destroy 
themselves. 

However, the proponents of this bill do seem to realize the force 
of the foregoing objections as evidenced by its provision, inserted by 
way of amendment, that it is to remain in effect only during the defense 
emergency. 

If constitutional guarantees are to be set aside for the safety of 
the Nation in war or in any of the conditions of National emergency, 
it is not for the Legislature of any State to do so. That is the function 
of the Congress of the United States, in the exercise of its power to 



MESSAGES TO THE LEGISLATURE— 1 94 1 



145 



provide for the common defense, or of the President under powers dele- 
gated to him by Congress. Nor should any temporary suspension of 
constitutional rights be confined to workers in private industries, 
whether they be National defense industries or all other industries 
to which this bill would apply. No such action was taken even by the 
National Government in the first World War. It was not considered 
expedient to do so. President Wilson, in 1917, said: 

"The highest and best form of efficiency is the spontaneous 
cooperation of free people." 

The leaders, legislative and executive, of this Nation in 1917, when 
it was engaged in the first World War, agreed that the rights of labor 
should be preserved and protected, not only because of the dictates of 
human decency, but because high efficiency in industrial production 
can be secured in no other way. 

Exigencies for National safety in time of war require the con- 
scription of both capital and labor, but it is not for the Legislature of 
any one State to do so as to either. But that is not the motive behind 
this bill. It is, in its essence, the same measure as Proposition No. 1, 
placed by certain employing interests on the 1938 ballot of California's 
general election in NoA'ember of that year, and which the people over- 
whelmingly defeated. 

As to the needs for any constitutional legislation to protect defense 
indastries and maintain peaceful industrial relations in our State, we 
now have ample laws against violence or disorderly conduct, laws for 
the protection of the rights of persons and property. They should be 
thoroughly and unrelentingly enforced, whether against members of 
labor unions or other groups. 

I signed Senate Bill 180, known as the "Anti-Sabotage Bill" which 
provides that whoever intentionally and maliciously destroys, impairs, 
injures, interferes or tampers with real or personal property with 
reasonable grounds to believe that such act will hinder, delay or inter- 
fere with the preparation of the United States for defense or for war, 
shall be guilty of a felony. That bill provided, and it is now the law, 
that portions of the public highways could be closed to public use if the 
property abutting thereon is used in the manufacture of products to be 
used in National defense, if the Highway Commissioner decided that 
the public safety, the safety of the property so required ; and I believe 
that these provisions will go a long way towards preventing any picket- 
ing designed to impede the National defense. One must also remember 
that picketing in any case to be lawful must be peaceful, and that if 
the picketing is carried on with force or violence or in any way in an 
unlawful manner, it is the duty of the law enforcement officers and 
the courts under the present law to prevent such picketing from going 
beyond the lawful limits. Too often the public mind is given the 
picture of lawful picketing as embracing the right to obstruct highways, 
to waylay workers, to barricade entrances to plants and like forcible 
and unlawful measures, but the fact of the matter is that such acts 
are at present unlawful and may be restrained and prevented under 
the present law. 

Peaceful industrial relations are desired by all loyal and right 
thinking citizens. But this can not be accomplished by class legisla- 



146 



STATE PAPERS AND PUBLIC ADDRESSES 



tion, such as this bill, which would deprive organized groups of workers 
of their fundamental economic and constitutional rights. 

If this bill were to go on our Statute books, operations under it 
would, in my humble judgment, foment unprecedented industrial strife 
in our State, interrupting beyond anj'' previous experience the normal 
course of industry and commerce. I fear that injunctions issued 
under it would be disrespected by organized workers affected as uncon- 
stitutional and discriminating, and dislocations in industrial relations 
would be greatly increased. 

It would delay the complete realization of the fundam-'utal rights 
of employees and the responsibilities which go with these rights. Our 
need is for better understanding between employers and employees 
of their rights and responsibilities, and closer cooperation for the better- 
ment of both and for service to the public; mediation and conciliation 
services, instead of laws like this bill, which would only agitate and 
arouse bitterness and antagonism between labor and management. 

I am thoroughly aware of the urgency which faces California labor, 
industry and agriculture in fulfilling their commitnients and their 
patriotic duties in the National Defense Program. 

Lockouts and strikes, particularly in the defense industries, seri- 
ously conflict with the National purpose to rapidly and adequately turn 
out defense armaments. The security of the Nation can not and should 
not be jeopardized by the exercise of these economic weapons, and the 
citizens of California can not be expected, at this juncture in the 
Nation's affairs, to look with favor upon stoppages in defense pre- 
paredness work over disputes between labor and management. 

The President has called for national unity. He has asked labor 
and management in defense industries to accept the recommendations 
of the National Board of Conciliation in the settlement of their differ- 
ences and to keep all work going. It is my conviction that California 
management and labor will respond patriotically to that duty, and I 
shall continue my efforts to make that response complete throughout 
the State. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 



MESSAGES TO THE LEGISLATURE— 1 94 1 



147 



UNEMPLOYMENT INSURANCE 



State of California, Governor's Office 

Sacramento, June 9, 1941 

To the Honorable Memhers of the Assembly 
Sacramento, California 

Greetings: I am returning herewith, without my signature, 
Assembly Bill No. 560 entitled : 

"An act to amend Sections 2, 7, 11, 12, 13, 15, 41, 44.2, 45, 45.9, 
45.10, 52.2, 53, 54, 55, 56, 57, 57.5, 61, 66, 75, 91, 92 and 94, to amend 
and renumber Section 70, and to repeal Sections 47, 48, 49, 50, 51, 58, 
67, 68, 69, 71 and 72 of, and to add Sections 7.1, 7.2, 23.1, 28, 67, 68, 
69, 70, 71 and 73 to, the Unemployment Insurance Act, relating to a 
system of unemployment insurance." 

My objections to this bill are generally that instead of improving 
the present law, it would cause recession from progress made and 
obstruct the further development of the California unemployment 
compensation program in carrying out the general social policy of our 
law and the Federal Social Security Act. It would jeopardize or 
interrupt administrative grants from the Federal Government and 
work injury both to employers and employees directly concerned in 
its equitable application and administration. Both from a social stand- 
point and from the standpoint of the general taxpayer who bears the 
burden of unemployment relief, this is not a good bill. 

It would modify the benefit rights of the working people of this 
State under the existing law in a manner so drastically restrictive and 
unjust as to defeat to a measurable degree the primary purposes of our 
unemplojonent insurance legislation ; it would make wholly inadequate 
provision for protecting the benefit rights of workers inducted into 
military service ; it would needlessly encumber administration of the 
act with detailed, rigid, procedural provisions which would be costly 
and" burdensome to claimants, employers and the department; and it, 
does not conform to the mandatory requirements of the reciproca! 
Federal legislation administered by the Social Security Board. 

It is obvious that the provisions of this bill are designed to deny 
benefits through harsh disqualifications to many deserving unemployed 
workers Avho themselves have ccntributed to the fund and for whom 
unemployment insurance was clearly intended, and by that means to 
accomplish an avoidance or reduction of contribution requirements. 
Nowhere in the bill can be found any provision liberalizing the present 
law or extending its scope to the thousands of working people now 
excluded from its beneficent protection. On the contrary, the bill 
provides for new exclusions from coverage, reduces benefits to partially 
employed persons, imposes severe and unjust penalties and disquali- 
fications. 

Many of the provisions of the bill, urged as reformations of alleged 
abuses of the law, actually are designed to deny millions of dollars in 
unemployment benefits payable under the present law to honest working 



148 



STATE PAPERS AND PUBLIC ADDRESSES 



people during the periods when they are unable to find employment, 
notwithstanding the fact that their earnings have contributed to the 
Unemployment Insurance Fund. Of this character are the disquali- 
fication provisions proposed in Section 20 of the bill, which would have 
a far-reaching effect in reducing benefit payments. The Social Security 
Board, in a letter from Oscar M. Powell, Executive Director of the 
board, has stated that : ' ' These provisions are the most severe that have 
ever been brought to the attention of the Bureau of Employment 
Security and seem to be incompatible with unemployment compensation 
principles. Under these provisions claimants would be disqualified 
without sufficient cause ; second, unusually severe penalties would be 
imposed as 'disqualifications' and, third, these penalties would operate 
arbitrarily with little relation to the circumstances leading to the indi- 
vidual 's disqualifications. ' ' 

Typical examples, illustrative of the harsh and unjust consequences 
which would be visited upon thousands of claimants were these pro- 
visions adopted, are easily discerned. Many employees, who have been 
honest laborers over many years of service and who have contributed 
to the Unemployment Fund, must occasionally surrender their jobs 
for compelling personal reasons, such as serious illness in their families. 
Others may quit one job to take another which they consider better or 
of longer duration. In either of these cases, the individual having 
returned to work may later suffer unemplojTiient due to a plant shut- 
down, shortage of materials, loss of business, etc. In all such cases the 
individual would not be able to draw any unemployment insurance 
until at least 15 months after he left his employment, notwithstanding 
his willingness and ability to work. In none of these cases can the 
individual's unemployment be ascribed to his "fault," nor can he be 
regarded as a malingerer on the fund. 

The act should provide for a reasonable deferment of benefits to 
prevent malingering, but disqualifications of this severity would be an 
injustice to tens of thousands of honest working people who become 
unemployed although able and willing to work. 

This bill's amendment of Section 57(a) would also disqualify 
thousands of working people whose unemployment is caused by the 
existence of a trade dispute but who are innocent bystanders, in no 
way connected with the dispute. It would also deny unemployment 
insurance to workers in search of steady employment who in good faith 
decline to accept an offer of temporary work to avoid losing an oppor- 
timity for permanent employment. 

A new section, set forth in Section 32 of the bill, purports to 
provide protection for individuals who enlist or are inducted into the 
armed services. But in reality this provision does not afford protection 
for many inducted into military service. The provision contains 
restrictions and discriminations which would have the effect of limiting 
the protection to a fraction of those who are rightfully entitled to it. 
Under the definition of "military worker" set forth in this provision, 
only those individuals who were engaged in covered "employment" at 
the time of induction will have their benefit rights preserved, and 
individuals who may have been unemployed at the time of induction 
or who may have been working in "uncovered work" are not so pro- 
tected. Further, the provision that: "Within 60 days after the 



MESSAGES TO THE LEGISLATURE— 1 94 1 



149 



effective date of this section, or within 60 days after the commence- 
ment of such military service, whichever is the later date, a worker 
may serve upon the commission a notice to tlie effect that he desires 
to be classified as a military worker," clearly means that only if 
this notice is given are the worker's benefit rights computed and 
preserved for him. Undoubtedly many, if not most, of these workers 
would fail to give this notice because of Jack of knowledge of the 
necessity therefor, and would consequently lose the benefit of the 
protection which the section purports to offer to them. Furthermore, 
the Department of Employment advises me that this notice is wholly 
unnecessary. 

The men who have enlisted or have been inducted into the mili- 
tary service under the draft laws make sacrifices which entitled them 
to a just measure of protection in their accrued rights under the unem- 
ployment compensation law, through provisions which are not hedged 
by unreasonable restrictions which would result in their defeating those 
rights. An amendment should be made to our law as will fully pre- 
serve to those who have been called to military service all rights which 
they possessed at the time of their induction upon the basis of their 
past earnings and contributions to the Unemployment Fund. I 
earnestly recommend to the Legislature the enactment at this session 
of such amendment. 

Certain of the proposed amendments set forth in the bill conflict 
with mandatory requirements of the Federal Social Security Act and 
Internal Revenue Code, thus jeopardizing Federal grants of funds to 
finance the administration of the State Unemployment Compensation 
Law, involving a loss to employers of this State of their normal and 
additional tax credit offset rights under the Federal Unemployment 
Tax Act, and a disorganization of the employment service. Upon the 
passage of this bill, I requested the Federal Social Security Board for 
an authoritative statement, with particular reference to the conformity 
of the provisions of the bill with the requirements and the social pur- 
poses of the Federal legislation. The Social Security Board has 
answered this request in a letter, dated June 3, 1941, and a telegram, 
dated June 4, 1941, copies of which answers are attached hereto for 
your information. 

As stated by the Federal Social Security Board, "Sections 67, 68, 
and 69, as proposed in Sections 27 through 29 of the bill, are undesira- 
ble from the standpoint of policy, administrative feasibility, and cost. 
It seems inadvisable to incorporate minute administrative procedure 
in the statute since the resulting inflexibility may create difficulty. 
The procedures provided appear not only unduly burdensome to the 
claimant and to the agency, but it is questionable whether certain of 
the provisions are necessary for the proper and efficient administration 
of the unemployment compensation law." 

Quoting further from the letter of the Executive Director of the 
Social Security Board: "Section 61(a) proposed in Section 22 of the 
bill would permit reduced contribution rates as long as the amount in 
the State fund exceeded one and one-half times the amount of benefits 
paid in the preceding calendar year. Such a provision is not con- 
sidered adequate to protect the solvency of the fund. 



150 



STATE PAPERS AND PUBLIC ADDRESSES 



"Also, Section 61(a), if amended as proposed, would leave the 
suspension of reduced contribution rates to the discretion of the com- 
mission. Tlie responsibility for establishing a minimum standard to 
protect the solvency of the fund shoiild be assumed by the Legislature 
and should uot be delegated by it as a discretionary power to any 
administrative body. A decline in the fund will in all probability be 
accompauied by a decline in business activity. The pressure upon any 
administrative ofiBcers to withhold exercise of such discretionary power, 
which would be brought by the interest affected in the matter, would 
make the sound exercise of such a discretion exceedingly difficult. ' ' 

Unless an adequate reserve is made a condition precedent to reduc- 
tion in contribution rates, the only means of protecting the fund is 
through the suspension of benefits under Section 61 of the present law, 
which is carried forward as Section 61(a) in this bill. Provision 
should be made that reductions in contribution rates shall be suspended 
whenever the fund falls below an adequate reserve, so that the solvency 
of the fund can be protected without suspending the payment of bene- 
fits. Such a suspension of benefits, made necessary because reduced 
contribution rates are continued after the fund falls below an adequate 
reserve, would result in a perversion of the primary purpose of the 
law, whicli is to pay benefits and stabilize purchasing power during the 
periods of unemployment. 

An adequate reserve is essential to the future of the Unemploy- 
ment Insurance Program, and the Legislature should provide therefor. 
Some months ago the California Employment Commission recom- 
mended to the Assembly the reserve they considered necessary to safe- 
guard the funds, as follows : Reduced contribution rates be revoked 
when the fund is less than two times the amount of benefits paid during 
the preceding calendar year, or two times the total amount of contribu- 
tions collected during the preceding calendar year, whichever is the 
greater. The Bureau of Employment Security has recommended 
reduced contribution rates shall be effective only if the amount in the 
fund meets two tests, namely, (1) it equals or exceeds eight (8) per 
cent of the average total annual payroll for the preceding three years; 
and (2) it equals or exceeds twice the highest amount of benefits paid 
during any one of the six preceding calendar years. It appears to me 
that either one of the two recommendations made would constitute the 
minimum adequate safeguard of the fund. Provisions adopting either 
one of these snggested standards could be properly made a part of 
A.B. 1177, which is a bill intended to eliminate ambiguities in the 
merit rating provisions of the existing law. In this connection, the 
Legislature should give consideration to the inevitable burden of benefit 
payments which the fund will sustain when the peak of the defense 
emergency has passed. I strongly recommend one of the foregoing 
statutory minimum tests in the interests of adequate protection for the 
workers in defense production and to prevent a dangerous reduction 
in the fund below level necessarj'^ to meet the knowTi future emergency 
arising when the defense program has passed its peak. 

Tlie inevitable result of a short-sighted policy with respect to ade- 
quate reserves will lead to the discontinuance of benefit payments which 
will adversely affect not only the welfare of unemployed workers but 
also the merchants and business organizations with whom they trade. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



151 



Any suspension of benefit payments will increase the cost of relief, 
which in turn will place a heavier burden on the general taxpayer. 

Section 5 of the bill eliminates tips and gratuities from the defini- 
tion of ' ' wages. ' ' The present act provides that tips and gratuities be 
included as wages and that the reasonable amount of tips and gratui- 
ties may be estimated in accordance with rules prescribed by the com- 
mission. A worker who reports tips to his employer and pays contri- 
butions thereon is able to draw unemployment insurance upon such tips. 
This amendment would make it impossible for workers desirous of 
reporting tips as wages to do so, and thereby deny them an opportunity 
to earn sufficient wages to qualify for unemployment insurance benefits. 

Section 6 of the bill provides a rigid definition of the term 
"week." This amendment will place an undue hardship on many 
employees who are required under the Minimum Standards for the 
administration of Partial Unemployment Benefits of the Social Secu- 
rity Board, efi'ective June 1, 1941, to initiate claims and verify earn- 
ings of partially unemployed workers. If the present flexible definition 
of the term "week" is retained, such employers may utilize carbon 
copies of existing pay rolls to verify the earnings of partially unem- 
ployed workers. Otherwise, many employers will be required to accrue 
wages to conform to the defined "week" of the statute rather than use 
a carbon copy of the check drawn in favor of the worker to satisfy the 
requirements of the Board's Minimum Standards. 

Section 44.2(c), added by Section 11 of the bill, provides that 
"Services performed by an individual while registered for full attend- 
ance at and regularly attending an established school, college or uni- 
versity; and the services during customary vacation periods by an 
individual who intends to return or go to or enroll at any such school, 
college or university as a student for the next regular term, are not 
subject to tax under Section 44 and no worker shall be entitled to 
benefits based upon wages earned by such services." The effect of 
this amendment would be to exclude approximately 105,000 students 
from the potential benefits of the act, of which number it is estimated 
approximately 50,000 are working full or part time. It would exclude 
individuals attending any school, including persons enrolled in trade 
schools and night schools, from the protection of unemployment insur- 
ance. Further, it would create a large group of noncovered worker's 
whom employers, particularly those engaged in seasonal industries, 
may find advantageous to utilize in lieu of their present workers because 
(1) no benefits could be paid to this group of workers, and, therefore, 
no charges made against the employer's account; (2) by utilizing 
students during the school vacation, the amount of work available to 
covered workers might be sufficiently reduced in a large number of 
cases that the workers would no longer be able to earn sufficient wages 
to qualify for benefits. 

Section 12 of the bill would reduce the interest rate on delinquent 
contributions from 1 per cent per month to one-half of 1 per cent per 
month or a fraction thereof. It is not believed desirable to reduce the 
interest rate on delinquent contributions for the following reasons : 
Other important tax statutes, such as the Bank and Corporation Fran- 
chise Act and the Personal Income Tax Act, provide a 1 per cent 
per month interest rate on delinquent payments. Even with a 1 per 



152 



STATE PAPERS AND PUBLIC ADDRESSES 



cent interest rate on delinquent payments, the Department of Employ- 
ment has approximately 4,500 delinquent accounts each quarter. If 
the interest rate were reduced, it is estimated that the number of 
delinquent accounts would be considerably increased. 

Section 19 of the bill eliminates the $3.00 wage credit now granted 
partially employed workers. Under the present law, the first $3.00 of 
weekly earnings of partially employed workers are not deducted from 
their benefits. This credit is allowed to encourage workers to seek 
casual or odd job work pending reemployment at full time. Forty- 
three states provide for a partial earnings credit. There is no justi- 
fication for California taking a backward step with respect to the 
granting of partial earnings credit. 

Section 19.5 of the bill provides that "Only an individual who is 
unemploj'ed through no fault of his own shall be eligible to receive 
benefits as provided in this act, and such benefits shall be paid with 
respect to anj' week in which he is so unemployed only if — (a) he has 
filed a claim for benefits with respect to such week during the next 
succeeding week; * * * " This provision is objectionable for 
several reasons: (1) It provides a rigid procedure not adaptable to meet 
changing conditions, (2) It does not enable the department to comply 
with the mandatory requirements of the Social Security Board with 
respect to their minimum standards for the payment of partial bene- 
fits, (3) It wiU deny an individual the right to draw benefits for which 
he is qualified simply because he is unable to claim such benefits during 
the succeeding week because he obtained full-time employment in that 
week, (4) Kegulations of the commission under the present act require 
an individual to certify each week except when good cause is shown. 
Experience has shown that there are many situations justifying the 
waiver of this requirement for good cause. With reference to this 
provision of the bill, the Executive Director of the Social Security 
Board says: "Section 56(a) and (b) and Section 67(b) and (c) of 
the California unemployment compensation law, if amended as proposed 
in Sections 19.5 and 27 of Assembly Bill 560, would not meet the 
standards established by the Social Security Board under Section 
303(a) (1) of the Social Security Act respecting the payment of bene- 
fits for partial unemployment. For example, the proposed amendment 
would appear to prevent the State agency. from permitting the retro- 
active filing of claims for partial benefits for the four preceding weeks 
as is required by the Board of Standards." 

By amendments to Section 56(c) this bill provides than an unem- 
ployed individual shall be eligible for benefits only if "During all of 
such week he is able to work and was available for work, and for the 
purposes of this requirement, no worker shall be deemed able to work 
unless he was both physically and mentally capable of performing anj^ 
work of substantially the same kind or nature in so far as physical 
or mental requirements are concerned, as work perfox-med by such an 
individual during a period or periods totaling one month or more out 
of the 12 months immediately preceding the week with respect to which 
he is applying for benefits." This pj-ovision would require an indi- 
vidual, no longer qualified to perform his usual work for physical or 
mental reasons, to either have worked for a period or periods totaling 
one month or more out of the 12 preceding months in an occupation in 



MESSAGES TO THE LEGISLATURE— 1 94 1 



153 



which he is now able to work. Failure to meet this condition would 
result in the denial of benefits to such an individual, even though he 
is able, available and qualified to work in another occupation. Any 
individual who, as a result of an industrial accident, is required to 
change his occupation, could be excluded from the protection of the 
act, even though fully recovered from the accident and thoroughly 
qualified for a new occupation. 

Your further attention is directed to the inequities inherent in the 
disqualification provisions which would be imposed by Section 20 
of the bill. 

Section 57(a), as amended, would provide: "An individual shall 
not be deemed unemployed through no fault of his own and shall not 
be eligible for benefits (a) during any week in which he is out of work 
with any prior employer because of a trade dispute and for two weeks 
thereafter, or for 15 months from the date he was last employed by 
such employer, whichever period is the shorter, if such individual left 
or remained away from or refused to continue his work with such 
employer because of such trade dispute. ' ' This amendment would dis- 
qualify innocent bystanders who are thrown out of work because of 
a trade dispute because the proposed amendment does not limit the dis- 
qualification to unemployment due to disputes at the plant at which a 
worker is or was last employed, as is the case under the present law, 
and so far as I can learn, under every unemployment insurance law in 
the United States. On the contrary, the great ma.iority of State laws 
contain a provision that even workers in the plant where a dispute 
exists, who are not participating in, financing and otherwise interested 
in the dispute, will not be denied benefits if they become unemployed 
due to the dispute. This amendment is subject to reasonable interpre- 
tation that all workers, regardless of their interest or connection with 
the dispute resulting in their unemployment, would be disqualified. 
Workers not connected with a trade union and having no interest 
whatever in the result of a trade dispute, should not be denied unem- 
ployment insurance when thrown out of work because a strike causes 
them to become unemployed. An example of the extreme scope of 
this amendment is indicated by the fact that under it a worker who, 
having once become involved in a dispute, later disassociates himself 
from the dispute and finds employment elsewhere, would nevertheless, 
be disqualified for the duration of the trade dispute, plus two weeks 
but not to exceed a period of 15 months from the commencement of the 
trade dispute with which he no longer has any connection whatsoever. 
The recent Ford Motor Company strike in Dearborn, Michigan, is also 
an excellent example of the far-reaching effect of the proposed amend- 
ment. The workers of the Richmond, California, plant who were 
thrown out of work because of the shutdown in Dearborn, Michigan, 
under this amendment could be denied benefits because of their unem- 
ployment, pending the settlement of the trade dispute 2,000 miles away. 
Mr. Powell, Executive Director of the Social Security Board, has made 
the following comment with respect to this proposed section: "The 
language of Section 20 of Assembly Bill 560, amending Section 57(a) 
of the State law, is ambiguous. If the words 'remained away from' are 
so interpreted as to deny benefits to any claimant under circumstances 
which might constitute an offer of 'new work' under conditions which 



11—18527 



154 



STATE PAPERS AND PUBLIC ADDRESSES 



the individual would be entitled to reject in view of the terms of 
Section 1603(a) (5) of the Internal Revenue Code, a question of the 
conformity of the State law with that section would result. Under 
certain circumstances an offer of work by a prior employer from whom 
the individual has long since been separated may constitute an offer 
of 'new work' within the purview of Section 1603(a) (5) of the Inter- 
nal Revenue Code. Unless Section 13(a) of the California law is con- 
sidered as controllinj; over the instant amendment to Section 57(a), 
the conformity issue mij^ht arise." 

Section 57(b) is amended to provide that an individual shall not 
be elifjible for benefits: "(b) During any period the benefits with 
respect to which are based in whole or in part on wages earned prior 
to the most recent date on whicli such individual without good cause 
refused to accept suitable employment when offered him. or failed 
without good cause to apply for and make a bona fide effort to obtain 
suitable employment when notified thereof by a district public employ- 
ment office." This would mean that if a woi'ker, after a number of 
years of continuous employment, were laid off on April 15, 1941, and 
soon thereafter were offered suitable employment by another employer 
for a few days' duration which he refused, the individual would not 
be able to qualify for any unemployment insurance until September 30, 
1942. In this case, the individual would have been disqualified for a 
period in excess of 17 months because he refused to accept suitable 
employment of a few days' duration, althoush that refusal was in order 
to hold himself in readiness for an a^'aihlble permanent job. A com- 
parative analysis of the disqualifications contained in the laws of other 
.States will indicate the extreme harshness of this amendment. Should 
an individual who refused suitable employment of a day's duration be 
disqualified for a period in excess of 15 months? A recent survey 
shows that 35 States disqualify an individual for refusing to accept 
suitable employment for a period from one to six weeks. The Cali- 
fornia Employment Commission has recommended to the Legislature 
that such an equitable provision be incorporated in our law. 

Section 57(d) provides that an individual shall not be eligible for 
benefits: "(d) During any week in Avhich he was laid off, .suspended, 
or discharged for misconduct connected with his work, if so found by 
the commission, and in the case of such discharge for not less than five 
successive weeks nor more than 10 successive weeks thereafter, and in 
addition in the case of such discharge the maximum total amount of 
benefits which would otherwise be payable to him in his then current 
benefit year, or if none be then current, his next benefit year, shall be 
reduced by an amount equal to not less than five nor more than 10 
times his weekly benefit amount." This amendment means that an 
individual, in addition to being disqualified for from five to 10 weeks 
for having been discharged for cause, would also have his benefits 
reduced not less than five nor more than 10 times his weekly benefit 
amount from either the current or the next succeeding benefit year. 
As an individual's next succeeding benefit year may not occur for a 
period of five, 10 or 15 or more years, his maximum total amount of 
benefits in such cases would be reduced from to .$180.00, 15 or 

more years after he was once discliarged for misconduct. No other 
State law contains such a provision. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



155 



Section 20.5 of the bill provides that "An otherwise eligible indi- 
vidual shall not be eligible for benefits with respect to unemployment 
(1) for any week with respect to which he has wilfully failed to report 
a material fact in order to obtain any benefit under this act and for the 
52 weeks immediately succeeding such week." The full implication of 
this section can be understood only when anah'zed in light of the lan- 
guage contained in Sections 67(b) and (c), as amended in Section 27 
of this bill, which sa,ys that every original claim and continued claim 
"shall state in writing, under oath of the claimant * * * (2) That the 
claimant was not then subject to any disqualification or condition of 
ineligibility for benefits under this act, or if any such disqualification 
or condition of ineligibility of benefits imder this act does exist, the 
nature thereof." Since claimants are required to state under oath a 
conclusion of law instead of a statement of fact at the time the claim 
is filed, many individuals may be disqualified for 53 weeks because they 
have made an affidavit of qualification, not knowing that they were 
subject to a disqualification or condition of ineligibility. No other 
State provides a 53-week disqualification for a wilful false statement. 
In fact, only 14 States provide any disqualification in such cases, and 
the majority of these disqualify an individual for only from one to 
10 weeks. I believe provision can and shoiild be made imposing reason- 
able penalties in the denial of benefits upon persons who wilfully make 
false statements of essential facts siipporting their claim. But I do 
not consider this amendment a proper provision for that purpose. 

Section 21 of the bill repeals Section 58 of the act. The disquali- 
fications now contained in Sections 58(a), (b), and (d) have been 
amended by this bill and made part of Sections 57 and 57.5. However, 
in the process of redrafting the material formerly contained in Section 
58, there has been eliminated the presumption that an individual has 
been discharged for reasons other than misconduct in connection with 
his work and not to have voluntarily left his Avork without good cause 
unless an employer has given notice to that effect to the commission 
in writing within five days after the termination of service. The 
Department of Employment is receiving over 30,000 termination 
notices a year under Section 58(c) and, based on information con- 
tained in these notices, over 20,000 disqualifications are being imposed 
annually. Tn order to enable the department to make initial deter-r 
minations based on all available facts and to pay benefits promptly, it 
is essential that the employers continue to notify the department when- 
ever any grounds exist which may require the disqualification of a 
claimant. Requiring employers to file a written notice within five days, 
setting forth such facts as are necessary to establish a prima facie case 
in support of the employer's contention that a worker left voluntarily 
or was dismissed for misconduct, would not seem to constitute a serious 
burden on the employers. In lieu of the language contained in Section 
58(c), this bill provides in Section 28 a system of notification of all 
prior base period and lag quarter employers which would require the 
department to furnish employers over 1,300,000 separate notices in 
order to save them the necessity of filing the notices now required in 
the limited number of eases where grounds for a possible disqualifica- 
tion exists. It is estimated that the cost of furnishing the required 
notices and the maintenance of the necessary records would be in excess 



156 



STATE PAPERS AND PUBLIC ADDRESSES 



of $500,000 annually; whereas, an adequate system of notifying 
employers is now provided by the department at a cost of less than 
$100,000 annually. 

New conditions for grants under the Social Security Act, required 
to be provided in State laws by July 1, 1941, would not be fulfilled by 
Assembly Bill 560. As a result, grants for administration of the Cali- 
fornia program would necessarily be suspended. Sections 8.4 and 8.5 
of Assembly Bill 560 purport to include provisions conforming with Sec- 
tion 303(a) (8) and (9) of the Social Security Act. AVliile in content 
the proposed provisions are adequate for that purpose, this bill, if 
approved, would not become law until 90 days after the Legislature 
adjourns, because this bill was not enacted as an urgency measure 
Section 303 (a) (8) and (9) of the Social Security Act requires tha* 
a State law conforming therewith contain the appropriate provisions 
effective July 1, 1941. Therefore, during the period from July 1, 1941, 
to the effective date of Assembly Bill 560, the California law would not 
conform with the above-cited sections of the Social Security Act, and 
grants for administration expenses would not be made available to the 
State. It is necessary, in order to avoid such a result, that an act con- 
taining the provisions contemplated by Section 303(a) (8) and (9) of 
the Social Security Act become effective on or before Jidy 1, 1941. 
Assembly Bill 1222, now before the Senate, which in content conforms 
with Section 303(a) (8) and (9) should be enacted forthwith as an 
urgency measure in order to become effective on or before July 1, 3941, 
and prevent the .suspension of Federal grants. 

Proponents of this bill argue in its support that cases have been 
found of individuals obtaining benefits to which they were not entitled, 
and that one of the purposes of this bill is to prevent the recurrence of 
such cases. I can not find in the provisions of the bill any greater pro- 
tection against chiselers than the present law affords. The elimination 
of chiselers on any law is usually accomplished only through efficient 
administration with adequate administrative powers. In the launching 
and development of anj' program of the scope and magnitude of the 
Unemployment Insurance Act, particularly during the early stages of 
the organization of the administrative machinery and the establishment 
of manuals and rules of procedure to carry into effect the intent of the 
law, it may not be doubted that some chiselers have found tlieir way to 
its benefits and isolated cases of abuse have occurred. The administra- 
tion of the act has so progressed, particularly during recent months, 
that such abuses have been reduced to a negligible quantity, and with 
proper cooperation of employers and workers, and increased knowledge 
and understanding by both parties of the purpose of the act and in the 
light of previous experience, it is reasonable to anticipate that abuses 
will be cut to the irreducible minimum, possible under any conceivable 
provisions in the act. No longer are benefits being paid to students or 
other unemployed workers not available for full time employment; nOr 
are benefits paid to expectant mothers until after it is clearly deter- 
mined that they are again able and available for work. No worker is 
permitted to receive the benefits of the act during any period in which 
he is not available and subject to call for work. But even if some abuses 
needing administrative correction do exist, the situation could not pos- 
sibly justify these far reaching, drastic and inequitable changes, 



MESSAGES TO THE LEGISLATURE— 1 94 1 



157 



jeopardizing the continuance of Federal jrrants for administration and 
tax credits for employers. 

I am attaching hereto a report on this bill made to me by the Cali- 
fornia Employment Commission in response to my reqiiest for its analy- 
sis and recommendation, which supports the foregoing objections and 
recommends this veto. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 

[Copy] 13:UC 

FEDERAL SECURITY AGENCY SOCIAL SECURITY BOARD 
W^ASHINGTON, D. C. 

June 3, 1941 

The Honorable Culbert L. Olson, Governor of California 
Sacramento, California 

Dear Governor: 

This is in answer to your letter of May 29th to Mr. A. J. Altmeyer, 
Chairman of the Social Security Board, in which you requested the 
Social Security Board's views with respect to California Assembly 
Bill 560, with particular reference to the conformity of its provisions 
with the requirements and the social purposes of the Federal Social 
Security Act and the board's standards. "We have examined this bill 
in the form in which it passed the Legislature and offer the following 
comment. 

Conformity Qxiestions Arising Under Section 303(a) of the 
Social Security Act 

1. New conditions for grants nnder the Social Security Act, 
required to be provided in State laws by July 1, 1941, would not be 
fulfilled by Assembly Bill 560. As a result, grants for administration 
of the California program would necessarily be suspended. Sections 
8.4 and 8.5 of Assembly Bill 560 purport to include provisions conform- 
ing with Section 303'(a) (8) and (9) of the Social Security Act. 
While in content the proposed provisions are adequate for that purpose, 
they will not become law until 90 days after the Tjegislature adjourns, 
under the terms of the California Constitution. Sections 303(a) (8) 
and (9) of the Social Security Act requires that a State law conforming 
therewith contain the appropiiate provisions effective July 1, 1941. 
Therefore, during the period from July 1, 1941, to the effective date 
of Assembly Bill 560, the California law will not conform with the 
above-cited sections of the Social Security Act and grants for adminis- 
tration expenses can not be made available to the State. 

It will be necessary, in order to avoid such a result, that any State 
law or laws containing the provisions contemplated by Section 303(a) 
(8) and (9) of the Social Security Act contain the language necessary 
to assure that such law or laws become effective on or before July 1, 
1941; it may be noted that Assembly Bill 1222 which in content would 



158 



STATE PAPERS AND PUBLIC ADDRESSES 



conform with Section .303(a) (9) contains such language, but that 
Assembly Bill 1193, which in content would conform with Section 
303(a) (8) does not contain appropriate lanfruagre to assure its imme- 
diate effective date. 

2. Section 56(a) and (b) and Section 67(b) and (c) of the Cali- 
fornia unemployment compensation law, if amended as proposed in 
Sections 19.5 and 27 of Assembly Bill 560, would not meet the stand- 
ards established by the Social Security Board under Section 303(a) 
(1) of the Social Security Act respecting: the payment of benefits for 
partial unemployment. For example, the proposed amendments would 
appear to prevent the State aprency from permittin<r the retroactive 
filing of claims for partial benefits for the four preceding weeks as is 
required by the board standards. 

Conformity Questions Arisinq Under Section 1603(a) (5) of the 
Internal Perenne Coele 
The language of Section 20 of Assembly Bill 560, amending Sec- 
tion 57(a) of the State law, is ambiguous. If the words "remained 
away from" are so interpreted as to deny benefits to any claimant 
under circumstances wliich might constitute an of^er of "new work" 
inider conditions which the individual would be entitled to reject in 
view of the terms of Section 1603(a') (5) of the Internal Revenue Code, 
a question of conformity of the State law witli that section would result. 
Tinder certain circumstances an offer of work by a prior employer from 
whom the individual lias long since been separated may constitute an 
offer of "new work" within the purview of Section 1603(a) f5) of 
the Internal Revenue Code. Unless Section 13(a) of the California law 
is considered as controllijig over the instant amendment to Section 
57(a), the conformity issue might arise. 

California Conformity Qneatiovs tinrler Section 303 fa) (4) atuj (5) of 
The Social Security Act and Sections 1603(a)(3) of the Fed- 
eral Unemployment Tax Act 

Section 2 of the bill would amend Section 7 of the law by para- 
graphs excluding from the definition of employment services per- 
formed by an individual as an insurance agent or solicitor, if all such 
service is performed for remuneration solely by way of commission and 
service performed by an individual under the age of 18 in the delivery 
or distribution of newspapers or shopping news. 

These exclusions are subject to the provisions of Subsection 1 pro- 
viding that the services thereafter enumerated shall be excluded from 
the definition of employment "if, when and during such times" as they 
are excluded from the Federal Unemployment Tax Act. Since the 
services of insurance salesmen and newsboys under 18 were excluded 
from the UnemplojTnent Tax Act by the Social Security Act amend- 
ments of 1939, it would appear that the new exclusions may be given a 
retroactive application, and that in such cases the California law may 
be construed to authorize refvuids of contributions which were due 
under the law in effect at the time of their payment. In such case, the 
California law will C07itain provisions authorizing the use of moneys 
in the Unemployment Compensation Fund contrary to limitations 
imposed by both the Social Security Act and the Federal Unemploy- 
ment Tax Act. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



159 



Major Policy Considerations 

1. The new disqualification provision in Section 57, proposed in 
Section 20 of the bill, would have <jreat significance for benefit pay- 
ments. These provisions are the most severe that have ever been 
brought to the attention of the Bureau of Employment Security and 
seem to be incompatible with unemployment compensation principles. 
Under these provisions claimants would be disqualified without suffi- 
cient cause, second, unusually severe penalties would be imposed as 
"disqualifications," and third, these penalties would operate arbitrar- 
ily with little relation to the circum.stances leading to the individual 's 
disqualification. To illustrate, an individxuil would be disqualified for 
leaving work without good cause attributable to his employer. Thus 
an individual who left work for the most compelling of personal rea- 
sons, but who was in all other respects eligible, would be disqualified 
merely because the separation was not directly attributable to his 
employer. To illustrate the second point, consider a claimant who has 
left work without good cause, but expects to seek reemployment after 
a time. Wlien such individual seeks to reenter the labor market, but 
is unsuccessful in finding work none of his past accumulated benefit 
rights would be available to him as they woidd all have been canceled 
iinder the proposed Section 57(c). Such individual could not become 
eligible for benefits until he had gone back to work and gradually 
acciimulated enough wage credits to qiialify ; this would in effect mean 
that he would probably be ineligible for at least a year. A disfiualifi- 
cation of this severity seems most undesirable in the face of the indi- 
vidual's demonstrated willingness to work over a period long enough 
to accumulate rights under the unemployment compensation law. 

The manner in which these disqualifications would operate may be 
revealed by comparing two individuals who refuse suitable work in 
comparable circumstances, one of whom has drawn nearly all the 
benefits to which he is entitled for that year, and one of whom has 
drawn only one week of benefits. In the former case, the disqualifi- 
cation will result in the cancellation of only a negligible amount of 
benefit rights, whereas the latter individual will be deprived of practi- 
cally his whole year's potential benefits. 

The Social Security Board recommends that disqualifications 
should be designed to simply postpone the enjoyment of the individual 's 
benefit rights for a limited period of time on the theory that period 
of unemployment which originates out of the individual's own action 
can not be presumed to continue to be attributable to the individual 
for the indefinite future. It should be noted that an individual 's cur- 
rent eligibility is always subject to his being found able to and available 
for work. 

2. Section 73 proposed in Section 32 of the bill in reality gives 
little or no protection to the benefit rights of individuals who enlist 
in or are inducted into the armed services. The provision that "within 
60 days after effective date of this section, or within 60 days after 
commencement of such military service, whichever is the later date, a 
worker must serve upon the commission a notice to the effect that he 
desires to be classified as a militai-y worker," clearly implies that any 
worker who fails to give such notice within the 60-day period will not 
be entitled to be so classified or to have benefits computed and credited 



160 



STATE PAPERS AND PUBLIC ADDRESSES 



to him. Since it may be expected that many, if not most of such 
workers will fail to srive snch notice because of lack of knowledfre of 
the necessity for so doinpr, this requirement makes of the provision an 
"empty pjesture. " In view of the fact that arranprements have been 
made on a National basis, by the Bureau of Employment Security, for 
identifyinpr information to be sent to each State asency for those indi- 
viduals in the armed services who have waee credits in their respective 
States, a provision requiring a military Avorker to notify his State as 
to his status seems unnecessary and imdesirable. 

Under the lanpruajre of this section, an individual who Avas inducted 
into military service must not only have been employed at the time of 
induction but must have been workinir in "covered work" if he is to 
benefit by this provision. Such discrimination a<;ainst individuals who 
may have been unemployed at the time of induction or who may 
have been working in "uncovered work" yet who have benefit rijrhts 
accrued, is most undesirable. 

3. Sections fi7, 68, and GO as proposed in Sections 27 through 29 
of the bill are undesirable from the standpoint of policy, administrative 
feasibility, and cost. It seems inadvisable to incorporate minute admin- 
istrative procedure in the statute since the resulting; inflexibility may 
create difficulty. The procedures provided appear not only unduly 
burdensome to the claimant and to the a<rency, but it is questionable 
whether certain of the provisions are necessary for the proper and 
efficient administration of the unemployment compensation law. 

4. Section 61 (a) proposed in Section 22 of the bill would permit 
reduced contribution rates as lonqr as the amount in the State fund 
exceeded one and one-half times the amount of benefits paid in the 
precedinjr calendar year. Such a provision is not considered adequate 
to protect the solvency of the fund. 

Also, Section 61 (a), if amended as proposed, would leave the 
suspension of reduced contribution rates to the discretion of the com- 
mission. The responsibility for establi.shiufr a minimum standard to 
protect the solvency of the fimd should be assumed by the Legisla- 
ture and should not be delegated by it as a discretionary power, to any 
administrative body. A decline in the fund will in all probability 
be accompanied by a decline in business activity. The pressure upon 
any administrative officers to withhold exercise of such discretionary 
power, which would be brought by the interests affected in the matter, 
would make the sound exercise of such a discretion exceedingly difficult. 

Under the provision of Section 61 (b), if amended as proposed, 
it would appear that the fund, established for the purpose of paying 
benefits, is to be "protected" by the suspension of benefits. Since the 
sole purpose of maintaining the fund is for the payment of benefits, 
the provision for suspension of benefits while the fund is solvent could 
apparently serve only to build the fund up to the point where reduced 
rates will again be effective. This would seem to be a denial of the 
whole purpose of an unemployment compensation law. It would make 
it appear that the purpose of the California law is to enable employers 
to obtain reductions on their Federal taxes and that the payment of 
benefits is of merely secondary consideration. 

5. Section 72 of the law, as proposed in Section 26 of the bill, 
would assess a penalty in an amount equal to 10 per cent of the final 



MESSAGES TO THE LEGISLATURE— 1 94 I 



161 



award, against claimants or employers who have acted in bad faith and 
without reasonable basis for appeal. While a benefit claimant coming 
within the purview of the provision would suffer a severe pecuniary- 
loss, a guilty employer would suffer only a debit in the bookkeeping 
account maintained for him by the agency for experience rating pur- 
poses. It is apparent that the "penalty" as regards the employer Avill 
in most instances occasion him no pecuniary loss whatsoever and that 
the provision is therefore discriminatory and inequitable as between 
claimants and employers. Also, since the employer's bad faith in 
taking appeals is in no way related to his experience with unemploy- 
ment risk (upon which his contribution rate should be based) this 
debit to the employer's experience rating account is inconsistent with 
experience rating principles. 

It is hoped that these comments will be helpful to you in determin- 
ing what action you will take on this bill. Please advise if we can be of 
any further assistance. 

Sincerely, 

OSCAR M. POWELL 

Executive Director 



Copy of Telegram Received by Governor Culbert L. Olson From Oscar 
M. Powell, Executive Director, Social Security Board 

June 4, 1941 

Re my letter dated June 3 concerning Assembly Bill 560 regret 
inadvertent omission therefrom of following two points : 

1. Re provision of bill whereby only 73 per cent of benefits will 
be charged for experience rating purposes, failure to charge total bene- 
fits paid raises question as to conformity of experience rating provi- 
sions with requirements of Section 1602 fa) (1) of Internal Revenue 
Code, and 

2. Bill contains no provision removing ambiguities of Section 39 
of California law concerning three years of experience as condition 
precedent to allowance of reduced rates of contributions. Social Secu- 
rity Board certified California law for additional credit purposes on 
basis of opinion of California Attorney General in which that official 
recognized and urged need for legislation removing all question. 

OSCAR M. POWELL 
Executive Director, Social Security Board 

Rx94 264 

San Francisco, Calif. 9 510P 

Hon. Culbert L. Olson, Governor 

State Capitol, Sacramento, California 

In reference to your request of the Department of Employment 
for an analysis and recommendations regarding Assembly Bill 560, 
we desire to make the following statement of our views : This bill is 
not a measure consistent with the basic principles of the present law, 
which would merely correct alleged abuses in the existing act. It 
proposes far-reaching changes which would make the California act one 



162 



STATE PAPERS AND PUBLIC ADDRESSES 



of the most restrictive miemployment insurance laws in the United 
States. The major effect of almost all the proposed changes would 
be to facilitate reductions in employers' contribution rates under the 
merit rating provisions. This would be accomplished by harsh and 
inequitable denials of benefits, and by an arbitrary reduction of 27 
per cent in the present benefit charge against employers' reserve 
accounts, without provisions that we think would adequately protect 
the Total Reserve Fund. The bill will raise very serious questions of 
conformity -with the minimum standards provided by the Social Secu- 
rity Act and Internal Revenue Code of the United States Government. 
One consequence of such nonconformity might be that the State of 
California would have to provide from its general funds the five million 
dollars for administrative expenses now being supplied annually by 
the United States Government or the work of the department, including 
its activities in the National defense program, woiild be compelled to 
shut down. Similarly the tax credit offset rights of employers might 
be jeopardized. In view of the serious effects which this bill would 
have upon vital interests of employees, employers and the State, we 
recommend that the bill be vetoed. 

Henry F. Grady, chairman and commissioner representative of 
the large employers. 

James L. Matthews, commissioner representative of the State and 
its interests and of the public. 

John F. Chambers, commissioner representative of labor and its 
interests. 

Ansley K. Salz, commissioner representative of independent mer- 
chants and small employers. 

John S. Horn, commissioner representative of labor and its 
interests. 



FIFTY-FOURTH LEGISLATURE 
FIRST EXTRAORDINARY SESSION 
Convened December 19, 1941 



I 



MESSAGE UPON CONVENING 



State of California, Governor's Office 

Sacramento, December 19, 1941 

Members of the Senate and the Assembly 
of the California Legislature 

Protection of life and property in California by ajjencies of the 
State Government in the present serious state of emergency required the 
calling of this special session of the Legislature. The need of funds to 
support the State Guard, a large portion of which is now in service, 
and for augmentation of the State Emergency Fund, is so urgent that I 
did not dare risk delay in calling you into extraordinary session to 
appropriate funds for these emergency needs. 

STATE guard 

Your act of June 17, 1941, directed the Governor "to organize and 
maintain a State Guard with a minimum numerical strength of 10,000 
persons and not to exceed such maximum strength as the Governor may 
prescribe." This act was passed in recognition of the fact, as stated 
in its urgency clause, that "An emergency exists in the United States 
and the State of California is providing adequate armies and facilities 
for defense. A large rearmament program is also under way, in which 
the manufacturing, airplane, shipbuilding and other plants of this 
State are taking their part. The National Guard, which has heretofore 
been available to this State as an organization for the defense and for 
the guarding of such plants and other places of strategic and military 
value is being called into the service of the United States and many 
units thereof have already left the State in such service. It is therefore 
necessary that steps be taken to provide troops to take their place and 
to make the unorganized militia more readily available for defense in 
this emergency and for the guarding of such plants and places of mili- 
tary and strategic value." And under Section 554 of the Military and 
Veterans Code, the Guard may be called into active service of the State 
for the causes and purposes for which the Governor could call the 
National Guard into service before it was inducted into the Federal 
Army. 

Pursuant to direction of the act of June 17, 1941, I caused the 
State Guard to be organized with volunteer enlistments until its numeri- 
cal strength exceeded 10,000 persons. On the seventh of this month, 
the date our country was drawn into actual war by the Japanese attack, 
the numerical strength of the Guard was approximately 15,000 persons. 
On that same day I was requested by the War Department of the 
United States to call the Guard into service to provide troops for the 
guarding of plants and places of military and strategic value in this 
State. At the same time I called for volunteers of 10,000 additional 
men, and within a week that additional number had enlisted in the 
Guard, and applications made by additional thousands for enlistment. 



[.65] 



166 



STATE PAPERS AND PUBLIC ADDRESSES 



The present strength of the Guard is, therefore, now 26,500 officers and 
men. Guard troops have been furnished, and a large portion of tlie 
personnel of the Guard is now on duty in the protection of plants and 
places of military and strategic value, and resources and utilities vital 
to civilian welfare and public safety. Such requests for Guard protec- 
tion have come not only from United States Army and Navy sources, 
but also from local governments for the protection of vital municipal 
utility supply plants. Response to these emergency calls for the serv- 
ices of the State Guard may, for an indefinite period, require the calling 
of all of its present personnel to active duty. Whether the full present 
strength of the Guard Avill be required on duty throughout the next 
year or during the rest of this biennium, or when, if at all, the Federal 
Government may make provision for guard duty at plants and places of 
military and strategic value in this State, I do not know. Nor eoiild 
anyone know definitely at this time. But it is certain that plants and 
places of military and strategic value are also plants and places of great 
value to the State, as well as are other plants and places requiring pro- 
tection from destruction. 

I have called upon The Adjutant General to furnish me a budget of 
the financial requirements for the maintenance of the Guard, and he 
has furnished me with such a budget, predicated on activation of the 
full present strength of the Guard for a period of one year. The total 
amount of this budget is $37,090,881 ; $5,478,000 of which is predicated 
upon amendments to the sections of the Military Code mentioned in 
Item 1 of your call to this special session. Tender the present ^Military 
Code, officers of the Guard, while on duty, are entitled to the same pay 
and allowance as officers of equal rank in the Army and Navy of the 
United States. All other personnel, including noncommissioned offi- 
cers, as well as privates, are entitled to receive $2 per day while on 
duty. Proposed amendments of these sections of the Military Code, 
would provide a step up in the pay allowances to the ranks of noncom- 
missionec.! officers above that allowed privates, ranging from $720 per 
year to privates, to $1,080 per year for first sergeants, and would pro- 
vide for allowances to dependents, measured by that provided for 
dependents of enlisted men in the United States Army. 

I am hoping and anticipating that the full present strength of the 
Guard may not be required on full-time duty throughout the coming 
year. I am hoping and anticipating, too, that the Federal Government 
will realize, before the end of the year, that it would be calling too 
severely on the financial resources of California to provide a military 
guard for all of our resources, plants and utilities, and that as we settle 
down to continuing war conditions, provision may be made by the 
Federal Government for a large part of such guarding service. I have 
already taken this matter up with the War Department and tlie Presi- 
dent, and it is receiving their attention. 

Therefore, I recommend that at this time the Legislature appro- 
priate, for pay allowances and maintenance to the State Guard, while 
in service, and for any substantial allowance that may be provided by 
amendments to the Military Code of the sections mentioned in the call, 
and for equipment, a total of at least $17,500,000, to be used as may be 
needed during the rest of the current biennium. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



167 



An appropriation for active duty by the Guard is in the nature of 
emergency appropriation, because the Guard is in no sense to be main- 
tained as a standing army. It is an organized part of the State Militia, 
ready to be called to active duty as emergencies require, and to receive 
allowances for maintenance only while on active duty. 

And I recommend that you also appropriate tlie further sum of 
$9,250,000 to the regular State Emergency Fund. The appropriation 
to this fund for the current biennium in Item 216 of Section 2 of the 
Budget Act of 1941, was $1,000,000, of which $750,000 remains unex- 
pended or unallotted. 

It is impossible at this time to state the exact amounts required by 
any department or office of the State to meet war emergency needs for 
an expansion of its services. Provision must be made to purchase items 
of equipment wliich will require time to fabricate. The exact volume 
of such equipment can not be determined precisely at the moment. The 
element of time and the readiness required to act, providing for the 
needs of this type as they become manifest, do not allow for delay in 
making funds available. 

Some of the more important emergency needs, noAv known to exist 
or which seem probable to suddenly develop, but which can not be 
measured by any specific appropriation and which are in excess of the 
provisions of the 1941-1943 budget, are as follows : 

DEPARTMENT OP NATURAL RESOURCES 

The Division of Forestry has imposed upon it by the conditions of 
war an emergency duty of the very first order and importance ; namely 
that of fire prevention and suppression in the State's unincorporated 
area outside of National forests and parks. Experience abroad and, 
during the first World War, in this country teaches us to expect a 
marked increase in the incidence of fires in forest, grain and brush lands 
as a result of sabotage attempts during war conditions. It may be 
anticipated, therefore, that the task of the Division of Forestry in sup- 
pressing many fires on scattered fronts will be substantially increased 
and greatly complicated. Additional equipment and manpower over 
and above the present budget will undoubtedly be required. In accord- 
ance with the State Fire Disaster Plan, approved by the State Council 
of Defense, this division has been called upon to man its 250 fire trucks 
throughout the winter months with a minimum crew of two, and to 
bring such equipment down out of tlie mountains into areas of higher 
hazard where it can serve as a highly mobile force of trained fire fighters 
and equipment. It is intended, imder the plan, that the Division of 
Forestry facilities will be used as a standby force to replace city and 
suburban fire departments which may be called upon to suppress 
"disaster" fires, and actually to assist in the suppression of such fires 
when local facilities prove inadequate. It may also become necessary to 
place the division's fire dispatching service on a 24-hour basis, and to 
extend dispatching service to areas not now served, if rural fire fighting 
equipment is to be mobilized and controlled on a State-wide basis in 
meeting the fire disasters which, according to competent military and 
fire fighting authorities, may be anticipated during war time. 



168 



STATE PAPERS AND PUBLIC ADDRESSES 



DEPARTMENT OF PUBLIC HEALTH 

The activities of this department are planned as an important part 
of the Civilian Defense Progiram in pnblic health and welfare services, 
and for that reason the Director of Pnblic Health was, by the State 
Council of Defense Act, made a member of that council. Funds must 
be made available to the Department of Health when needed for its 
services in epidemics, for any larpre evacuations of civilian populations. 
Its activities must be intensified in the protection of water supplies 
through the prevention of stream pollution, supervision of sewag:e dis- 
posal, inspection of food and druprs, rodent control and mosquito abate- 
ment, and freneral regulation of sanitation conditions. The vast 
expansion of industrial plants for defense production in California 
lias increased the volume of work required of the Bureau of Industrial 
Hyp:iene. An increasinsr volume of work is beinir placed upon the 
Division of Laboratories and the Division of Vital Statistics. An 
increasinp: amount of services will be required by this department in 
the diaprno.sis of communicable diseases and in providing blood tests 
for the Selective Service. It may be necessary to extend the facilities 
of its laboratories, the manufacture of vaccines, and the examination of 
water supplies, chemical analysis of food products, and other laboratory 
services that will safe<ruard public health in wartime. The Division of 
Vital Statistics is now beinpr flooded with requests for birth certificates 
for men entering: the Army or Navy, war industries, and communica- 
tion services. It must search its files for certificates for American- 
born Japanese required to prove their citizenship. 

STATE DEPARTMENT OF AGRICULTURE 

Under the present "Food for Defense Proprram" as promulgated 
by the United States Department of Anrriculture, the importance of 
greater production of foodstuffs and acricultural commodities is 
stressed. Every bureau within the State Department of Ajrriculture 
may be called upon for increased services in the attainment of the 
heav;v^ production ffoals established by the ITnited States Department 
of Agriculture for this State. Estimates of the amount of funds which 
may be needed to meet such requirements obviously can not be made 
at this time. 

DEPARTMENT OF INDUSTRIAL RELATIONS 

Increase in employment prenerally in the State, as a result of the 
defense program and the war, has greatly exceeded all expectations 
upon which the budget for the Department of Industrial Relations 
was based. There have been increases in the occurrences of accidents 
in the war defense industries, and the necessity of providing additional 
safety engineers and inspectors in the Accident Prevention Bureau of 
the Division of Industrial Accidents and Safety, as may be required, 
may properly call upon allocations from the State Emergency Fund. 
And the Division of Fire Safety is being called upon for extraordinary 
work, far exceeding the capacity of the present staff. 

FLOODS 

The occurrence of floods during the high water periods has always 
presented needs for emergency assistance from the Division of Water 



MESSAGES TO THE LEGISLATURE— 1 94 1 



169 



Resources, which now has no funds for that purpose. Many parts of 
California are tlireatened by and suffer from flood conditions each 
year, for the relief of which emergency funds have been properly 
allocated. 

sociaij welfare 

In the event it should become necessary to remove civilian popu- 
lations from coastal defense areas to interior points, emergency services 
would be required of the Department of Social Welfare in providing 
care for evacuees. 

STATE COUNCIL OF DEFENSE 

The State Council of Defense must be placed upon an adequate 
basis as to technical staff, personnel and equipment. This council, which 
has been engaged in the formulation of civilian defense plans in coop- 
eration with the National Office of Civilian Defense, and for the organi- 
zation of local defense councils, is now required to carry those plans 
into effect and to supervise and direct a multitude of tasks incident 
thereto, involving a large amount of detailed work on the part of its 
staff. It has already been necessary to make allotments to the work 
of this council from the existing Emergency Fund. Additional funds 
are now required, a budget for which can not be immediately and fully 
determined upon by the council. The necessary staff can not be pres- 
ently predicted. It must be based upon actual need as the work of 
the council progresses. 

The State budget for 1941-43, as drafted and approved, contem- 
plated our Nation at peace during the two-year period which it covered. 
Now we are at war, and California has become a domestic front in this 
conflict. 

A cursory review of the State budget for 1941-1943 indicates that 
in some items, expenditures will be less than the amounts anticipated, 
while in other State services, emergency expenditures in excess of the 
appropriations now authorized will be required. Certain school costs 
will be less than the amounts estimated a year ago. Attendance at 
State colleges, junior colleges, and the university has fallen markedly 
below the budget estimates, and there has been some increase in high 
school enrollment. Although special vocational courses have been 
expended in practically all schools as a result of the Defense Training 
Program, the increased cost for these classes will be more than offset 
by curtailed enrollment in regular secondary schools. State expendi- 
tures for aid to the needy aged, blind, and children will be below the 
budget estimates, to the extent of at least $2,500,000. 

On the other hand, the emergencies of war will make imperative 
expansions of certain services of other State governmental agencies. 
The safety and welfare of the ci.vilian population of this State demands 
that moneys be made available to meet every emergency that may arise 
in the changed and still changing conditions resulting from a state of 
war. 

In peace time, as much as $8,545,000 has been appropriated as 
emergency funds in a biennium. Surely in war time, fraught with its 
perils to the safety of life and property in the State, an emergency 
fund of at least $10,000,000 should be provided. 



12—18527 



170 



STATE PAPERS AND PUBLIC ADDRESSES 



Supplementing my recommendation for appropriation of funds 
for the State Guard, it is further recommended that legislation be 
adopted to provide that enlisted men in the State Guard, when called 
into active service, shall receive an allowance for the support of their 
actual dependents. 

It is also recommended that no change he made in the provisions 
concerning officers and that the private or apprentice seamen continue 
to receive $2 per day but that for each step in rank above private or 
apprentice seaman, enlisted men shall receive a 10 per cent increase 
in base pay. 

Section 340 of the Military and Veterans Code now provides that 
where members of the National Guard or Naval Militia not in active 
service of the United States are killed or injured in active service, 
such member or his dependents shall be entitled to receive benefits 
under the Workmen 's Compensation Act. Section 395 of such code now 
provides that public officers or employees who are iiioml)ers of the 
National Guard or Naval Militia and who are called into active duty as 
such members shall be entitled to absent themselves wliile engaged in 
the performance of ordered military or naval duty. Such provisions 
should be made applicable to members of the State Guard, and I so 
recommend. 

Doubt exists as to the authority of counties, cities, and cities and 
counties, to expend public funds either unbudgoted or budgeted for 
other purposes to meet expenses necessarily arising during a state of 
war. In order to provide ample authority to make needed expendi- 
tures, the third item of the original proclamation for this session of the 
Legislature was made. Conferences concerning legislation to be 
adopted in regard to such subject revealed the fact that there was 
also a doubt as to the authority of various local districts and other local 
public agencies to make expenditures for war purposes, and that 
there was also doubt as to the authority of all local public agencies 
to use or permit the iLse of their property for war juirposes. Such 
public agencies are being continually requested to make various of 
their facilities and property available for the use of the Army and other 
defense forces, and so, prior to the convening of this extraordinar.y 
session of the Legislature, a supplementary proclamation was issued 
to permit legislation granting the authority mentioned to all such 
public agencies, and I recommend that you adopt such legislation. 

I have also included in the call, as amended, the consideration of 
ratification of charter amendments of local governments. 

Your State Council of Defense joins me in making these recom- 
mendations. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 



MESSAGES TO THE LEGISLATURE— 1 94 1 



171 



EXISTENCE OF WAR EMERGENCY 



State of California, Governor's Office 

Sacramento, December 20, 1941 

Members of the Senate and Assembly 

Greetings: For your information, in connection with the matters 
submitted to you for consideration in my call of the present extraor- 
dinary session, and for the information of the public as to the serious 
need for action on the part of the Legislature as recommended in my 
message to you yesterday, I respectfully call your attention to the 
attached communications which I have just now received from Lieu- 
tenant General J. Tj. DeWitt, Commanding General, Western Defense 
Command, Headquarters at the Presidio, San Francisco, California. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 

Confidential 
War Department 
Headquarters Western Defense Command and Fourth Army 
Presidio of San Francisco, California 

Office of the Commanding General 

December 19, 1941 

Honorable Culbert L. Olson 

Governor of the State of California 
Sacramento, California 

Dear Go\ternor : I can not emphasize to you too stronsjly the very 
real menace at this time to the National safety which arises from the 
presence in the States comprising the Western Defense Command, in 
which the State of California is included, of the considerable number 
of enemy aliens and possible fifth columnists. 

Already, since the beginning of hostilities against this country, 
proof has mounted of fifth column activity and sabotage, particularly 
in Hawaii and the Philippines, which have caused serious property and 
Military damage and have contributed to the loss of many American 
lives. 

Conditions which favored those activities and produced those 
results, exist within your State, and the opportunity for hostile 
activity of the kind here mentioned is increased during times when 
the people generally are occupied and their attention diverted by fairs, 
fiestas and public gatherings and occasions such as the Christmas and 
New Year's holiday season which is now at hand. 

It is vital to the safety and well-being of all our people, as well as 
to the accomplishment of the mission of the Military Forces engaged 



172 



STATE PAPERS AND PUBLIC ADDRESSES 



in protecting them and their activities that you, through every means 
at your command, bring the actual and potential sources of such 
activities under the closest possible surveillance, and that you promptly 
furnish, or cause to be furnished to the Federal Bureau of Investigation 
or to the nearest Military authorities, information of suspicious aliens 
or other persons and of all suspicious activities whatsoever of the kind 
in question. In addition, all enemy aliens and others believed to be 
actually or potentially dangerous as fifth columnists or saboteurs should, 
as far as practicable, be denied entrance or access to sensitive areas 
such as oil fields, refineries and oil storage facilities, railroad and high- 
way bridges, docks, essential utilities and industrial plants. 

Specifically, and in addition to such other measures as may suggest 
them.selves, I request that you give the widest publicity to the situation 
now existing through a Proclamation, reciting the exi.sting facts, declar- 
ing the existence of an unliniitod emergency, and if you have not already 
done so, authorizing the voluntary enrollment of State Guards and such 
other and additional protective forces as may be authorized by the laws 
of your State ; that you designate some responsible and competent State 
official to coordinate, supervise and direct the activities of all regular 
peace and other law enforcement officers of your State in all matters, 
to coordinate all measures for State and civilian defense in cooperation 
with the Armed Forces of the TTnited States, to direct and complete 
the Voluntary Civilian defense organization of your State and to 
expedite the enrollment and training of personnel for civilian protec- 
tion services; and, finally, that you enjoin upon the people prompt 
compliance with the directives of duly constituted Military and civilian 
authorities. 

I assure you that the measures above outlined, if promptly put 
into operation and carried through with energy and resolution, will 
immeasurably assist the protection of our people and the accomplish- 
ment of the Military mission assigned the undersigned as Commander 
of the "Western Theatre of Operations (Western Defense Command). 

I am taking all practicable steps with the troops and means under 
my command to insure the nonimpairment of those resources and 
activities essential to the National defense within the AVestern Theatre 
of Operations which comprises the States of California, Oregon, "Wash- 
ington. Nevada, Utah, Idaho, Arizona and ]\Iontana. 

The accomplishment of tlie Military mission assigned, in all its 
ramifications, does not permit the assignment of troops for the protec- 
tion of every possible place, facility or industry that is subject to 
sabotage and fifth column activity. The people in every State and 
every community of the "Western Theatre of Operations have a definite 
responsibility in this regard ; and it is in order to insure that they 
realize it and bring to bear every possible means for combating this 
insidious danger that I ask you to take the action requested herein. 

I am furnishing a copy of this letter to the Military commanders 
responsible for the application of Military measures within your State 
with direction that they contact the municipal authorities within their 
areas to insure full cooperation and coordination between the action 
of the troops under their command and the civil authorities. 



MESSAGES TO THE LEGISLATURE— 1 94 1 



173 



A letter similar to this one is being sent to the Governors of the 
other States named above as comprising the Western Theatre of 
Operations. 

Very truly yours, 
(Signed) 

J. L. DeWITT 
Lieutenant General, U. S. Array 

War Department 
Headquarters Western Defense Command and Fourth Army 
Presidio of San Francisco, California 

Office of the Commanding General 

December 19, 1941 

Honorable Culbert L. Olson 

Governor of the State of California 
Sacramento, California 

Dear Governor: Kef erring to my letter to you of this date con- 
cerning measures for the prevention of fifth column activities and 
sabotage, I have today received a copy of the Proclamation issued by 
you on December 14, 1941, reciting the existence of a state of war 
between the United States and Japan, Germany, and Italy. 

This Proclamation substantially complies with the pertinent sug- 
gestions contained in my letter above mentioned. 

Your prompt and vigorous action in thus proclaiming the existing 
state of war and in setting in motion the defense forces of your State 
is a source of much gratification. 

Very truly yours, 
(Signed) 

J. L. DeWITT 
Lieutenant General, U. S. Army 

( COPY — teletype ) 

7 Sac. 12-1.5-41 2.30 p.m., Emergency— All Points Bulletin 
Proclamation 

Executive Department, State of California 
Sacramento, December 14, 1941 

Whereas, A state of war now exists between the Government of 
the United States of America and the governments of Japan, Germany 
and Italy; and 

Whereas, With a thousand miles of coast line along the Pacific, 
the geographical position of the State of California places it in the 
first line of defense against invasion, and this State may at any time 
become a Theatre of War. Already enemy reconnaissance, if not 
bombing, planes are known to have passed along our coast and to 
have covered a part of the interior areas. Our great natural resources, 
our huge oil supplies, our enormous agricultural and industrial pro- 
duction, our numerous air craft factories, shipbuilding yai-ds, and other 
facilities needed to sustain our Nation in the winning of the war, are 
the natural objectives of attempted aggressions of our enemies; and 



174 



STATE PAPERS AND PUBLIC ADDRESSES 



"Whereas, California is thus confronted with nnmerous and imme- 
diate problems arising out of the existing state of war, including the 
need for full cooperation of its citizens in carrying out plans and 
directions of the Army and the Navy and the other war and civilian 
defense agencies of the Grovernment of the United States and of the 
State and local governments in the successful pi'osecution of the war, 
and for home and civilian defense and protection of the life and prop- 
erty and the health and welfare of the civilian population; and 

Wpiereas, The State of California has within its borders numerous 
extensive Military and Naval reservations and bases dependent upon 
its transportation and communication facilities, its port facilities, its 
bridges, dams, levees, iitilities, essential to the successful prosecution 
of the war and to civilian protection, requiring in that protection the 
services of State and local governments; and 

"Whereas, The welfare and safety of the people of this State and 
the protection of its resources, utilities and facilities against sabotage 
and siibversive activities calls for emergency actions on the part of 
State and local governments; and 

"Whereas, Plans are adopted by the State Council of Defense, in 
cooperation with the office of civilian defense of the Nation and of 
local councils of defense, for the purpose of meeting these requirements 
and responding to the needs of the people in any ehaergency, disaster 
or threat of disastei-, in any part of the State; and 

Whereas, The present emergency must be recognized by State and 
local governments and by the people in order that the plans and pur- 
pose of the State Government and its Council of Defense and the 
several local governments and their councils of defense may be suc- 
cessfully effectuated ; now, therefore, 

I, Ct^lbert L. Olson, Governor of the State of CALrpoRNiA, 
Under and by virtue of the authority vested in me as Chief Executive 
of the State of California, and in accordance with the Constit\ition and 
laws of the State, do hereby proclaim and declare that a state of 
emergency exists throughout the State of California, and I hereby 
designate the duly constituted officers of the State and of each city 
and of each city and county and of each county, as the officers to take 
charge of this emergency in their respective jurisdictions, and to carry 
into effect plans for civil protection adopted by the State Council of 
Defense and by local councils of defense in accordance therewith, in 
cooperation with the duly constituted aiithorities of the Government 
of the United States in the prosecution of the war and in provisions 
for civilian protection. 

In "Witness "Whereof, I have hereunto set my hand and caused 
the Great Seal of the State of California to be affixed this fourteenth 
day of December, A. D., nineteen hundred and forty-one. 



[seal] 



Attest : 

(the great seal of the 
state of California) 



CULBEET L. OLSON 

Governor of California 

PAUL PEEK 

Secretary of State 



FIFTY-FOURTH LEGISLATURE 
SECOND EXTRAORDINARY SESSION 

Convened January 17, 1942 



MESSAGE UPON CONVENING 



State of California, Governor's Office 

Sacramento, January 17, 1942 

Members of the Senafe and the Assemhhj 
of the California Legislature 

Greetings : I have called you into this extraordinary session imme- 
diately at approximately the time you have indicated your intention of 
concluding the extraordinary session called for December 19, 1941, in 
order that you may consider three subjects which I believe to be of 
sufificient importance, in the light of the present emergency, to justify 
your immediate attention. I believe that the subjects are of such an 
uncontroversial nature as to enable you to speedily consider and act 
upon them immediately. 

The first item was included at the request of the United States 
Navy. Attached hereto is a letter to me from Rear Admiral J. W. 
Greenslade, Commandant of the Twelfth Naval District on this subject. 

The second item was included at the request of Henry Morgen- 
thau. Secretary of the Treasury. A copy of his telegram to me on this 
subject also is appended hereto. Ijegislation upon this subject should 
enable thousands of public employees to conveniently purchase Defense 
Savings Bonds by the setting up of a procedure of pay roll deductions 
to be made at the voluntary request of the employees. 

The third item is included at the request of the sponsors of the 
Youth Correction Authority Act. In accordance with the act passed 
at the 1941 Session of the Legislature, I appointed two members from 
a panel submitted to me by officials of the organizations designated in 
the act. One of these is a county probation officer, and the other a 
superintendent of a State correctional school. Neither of said officials 
have accepted such appointment because of their unwillingness, during 
the present emergency, to leave their present duties. Sponsors of the 
act feel, and I agree with them, that these two appointees will be of 
invaluable assistance in organizing the Authority and its work while 
retaining their present positions and that they should be permitted to 
serve without compensation other than incurred expenses. 

Respectfully submitted. 

CULBERT L. OLSON 

Governor of California 

COPY 

District Staff Headquarters, Twelfth Naval District 

San Francisco, California, January 7, 1942 

Honorable Culbert L. Olson, Governor, State of California 
Sacramento, California 
Sir: It is requested that a call be placed before the Legislature at 
its coming session on January 12, so that there may be an amendment 



[ 177 ] 



178 



STATE PAPERS AND PUBLIC ADDRESSES 



to the Statutes of 1933, page 2366, to add a new section thereto which 
will permit the City and County of San Francisco to transfer to the 
Navy Department that property generally kno^vn as Treasure Island. 

In explanation of the above, may I state that the amending Act 
of December 5, 1940, which permitted the City to lease a portion of 
Treasure Island to the Navy Department, contained a clause to the 
effect that San Francisco Bay, as a key harbor on the Pacific Coast, 
will be the center of much of the activity in connection with the neces- 
sary prompt and widespread Military and Naval Armament Program. 
Events have proved this statement to be fully justified. Treasure 
Island, located in the harbor, is ideally suited to the uses and purposes 
of the Na\y in the National defense, and amounts in excess of $4,000,000 
have already been allotted by the Navy Department for Naval opera- 
tions on the island. Doubtless, large additional expenditures will be 
made in connection with the anticipated future expansion of Naval 
activities. Under such circumstances, the policy of the Navy Depart- 
ment dictates that the Na-vy should have title to the island. 

At numerous conferences which have been held with the city offi- 
cials and representatives of the San Francisco Chamber of Commerce, 
plans and means for the acquisition of Treasiire Island by the Navy 
Department have been discussed. All parties agree that it would be 
preferable for the Navy Department to acquire title to the property 
imder an agreement with the city, rather than by condemnation pro- 
ceedings. To this end, the Secretary of the N&xy, on January 6, 1942, 
sent a telegram to Mayor Possi urgently recommending that negotia- 
tions for the transfer of title be speedily consummated and that an 
enabling act be inti'oduced during the coming session of the California 
Legislature on January 12, which will permit the city to transfer the 
title to the Navy Department. 

It is possible that certain other amendments should be made to the 
act giving the Navy the right to reclaim additional lands nn the shoals 
of Yerba Buena Island. Officers attached to the district are prepared 
to collaborate with the Legislative Counsel in the preparation of the 
propo.sed legislation and in any appearances before the Legislature, 
which you may deem advisable. 

Your active cooperation in this matter on behalf of the Navy is 
solicited and depended upon. 

Very truly yours, 

J. W. GREENSLADE 
Rear Admiral, U. S. Navy Commandant, Twelfth Naval District 

COPT 

Chicago, IijLINOis, December 17, 1941 

Honnrnhlc Cnlhcrt L. Olson. Govrrnor of California 
Sacramento, California 

Will you not in your call for contemplated special session of 
Legislature include the important item of enabling legislation allowing 
pay roll deduction plans to be put into effect for the purchase of 



MESSAGES TO THE LEGISLATURE— 1 942 



179 



defense savings bonds by State, county and municipal employees and 
school teachers. This request in view of critical National emergency 
and consequent necessity for defense funds and systematic saving to 
avoid dangerous inflation. Edward H. Heller, Chairman, Defense 
Savings Committee, Northern California, or James G. Smyth, Admin- 
istrator, Defense Savings Staff, Northern California, address 733 
Monadnock Building, San Francisco, have full information as to details 
of required legislation. 



HENRY MORGENTHAU, JR. 

Secretary of the Treasury 



PART III 

o 

PUBLIC ADDRESSES AND RADIO TALKS 

o 

1939 



1 



CALIFORNIA'S LABOR PROBLEMS 

Radio Address delivered over Columbia Broadcasting System, 
Sunday, March 19, 1939 

My Fellow Citizens 

Tonight, I want to talk with you abont California's labor prob- 
lems. I hope the good people of Redding in Shasta County, and of 
Westwood in Lassen County, will listen to what I have to say. 

America's workers have achieved great advances in the past few 
years. The crowning achievement has been recognition of the right 
of collective bargaining. These gains have been made through organ- 
ized labor's long and bitter struggle. Separate union groups should 
not now be found fighting among themselves over the question of which 
union shall have jurisdiction over the workers on given jobs. 

Yet, there is a jurisdictional battle going on, and it is working 
great harm. This is the very reason President Roosevelt has called 
upon the leaders of the A. F. of L. and of the C. I. 0. to meet with him, 
to adjust and resolve their differences, to formulate a basis for peace, 
unity, and strength in the ranks of labor. This is easier said than 
done. These jurisdictional battles do not rest upon mere superficial 
differences. They rest upon deep-rooted economic causes. 

But, while labor is searching for unity of organization, the 
workers themselves should refrain from internal struggles which oper- 
ate to defeat their common purpose. They should not close down 
industrial plants to engage in mere jurisdictional warfare. They 
should not regard each other as enemies. They are brothers with a 
common cause, which can be served by cooperation; but defeated if 
they fight each other. 

Examples of the bad effects of these jurisdictional conflicts are 
found at the lumber mills in Westwood in Lassen County, and at the 
Delta timnel job, a)id other Central Valley Project jobs, near Redding 
in Shasta County. In these areas, jurisdictional disputes have been 
destructive, not only of peace and public safety, hnt of constitutional 
rights ; to say nothing of the welfare of the workers themselves. 

Such effects are inevitable when either groiip attempts control by 
force, violence, or intimidation. "When they threaten property destruc- 
tion, civil warfare and bloodshed beyond the power of local authorities 
to control, it then becomes the State's duty to protect the personal 
safety of citizens, to preserve order, and to prevent mobs from taking 
the law into their own hands. 

You, the people, have established the California National Guard 
to move, when the Governor finds it necessary, into any part of the 
State to preserve order and protect citizens and property. 

Recently, in Shasta County, as a result of the contest for juris- 
diction over the Delta tunnel job, the two unions mobilized. Men were 
marching to open conflict, armed with clubs. The sheriff told me his 
forces were insufficient to handle the situation, and that bloodshed 
might ensue unless State troops were sent in. 



[183] 



184 



STATE PAPERS AND PUBLIC ADDRESSES 



Nothing could grieve me more than to be compelled to use troops 
to settle a labor dispute, whether between competing labor groups or 
between labor and employer. I am determined to exhaust every means 
within my power and influence as Governor to restore peace without 
the use of armed force. I plead for the cause of civil liberties, of 
peaceful forces for the cause of labor itself. I appeal to the workers, 
and to their organizations to abandon all thought of violence and law- 
lessness as a means of settling labor disputes. 

I dispatched officers of the National Guard to Redding to confer 
with members of both labor organizations, and to convey my appeal. 
The response has been most gratifying. Violence and lawlessness 
have been averted. 

In order to iinderstand the situation at Redding, you should know 
that the general contractor on the Delta tunnel job, before the job was 
started, made a contract with one of the labor union groups. The other 
union complained that this worked unfair discrimination against its 
members. 

If the machinery and devices of the National Labor Relations Act 
could be used, the workers could ballot secretly to designate their col- 
lective bargaining agency, and thus the Redding dispute could be 
settled readily. But it is believed that the work on the Shasta Dam 
does not come under the jurisdiction of the Labor Board. 

"We do not have a State Labor Relations Act, which would give 
similar powers to our State authorities. Nor do we have any law pro- 
viding for the appointment by the Governor of a mediation board to 
which he may delegate such services for settlement of industrial dis- 
putes as I am now performing. I believe we should have such laws. 

Before leaving the Redding situation, I suggest, as a means to 
peace, that the different unions, and their members, confer together 
over their mutual problems. I suggest that they give special consid- 
eration to the kinds of work the members of their respective unions are 
best able to perform, and that they seek accordingly to apportion and 
share the work as equitably as possible, all in a spirit of cooperation 
and good will. 

The City of Westwood, in Lassen County, has a population of 
about six thousand people, entirely dependent upon the operation of 
the mills of the Red River Lumber Company. Westwood is a so-called 
Company town. That is, the lumber company owns and controls prac- 
tically all property, and concessions, stores and commercial privileges. 
The mills employ upward of 2000 men. Last July, as an outgrowth 
of several years of organization work, the labor unions, such as they 
were at Westwood, were succeeded by an A. F. of L. Union, and a 
C. I. O. Union. In July the company cut wages. A strike ensued, 
led by one of the unions. 

Trouble followed. It developed into actual open warfare. Mem- 
bers of the one labor group were actually driven out of town, in what 
all now admit was a lawless purge, attended by physical force and 
violence. 

Since the products of the Westwood mills move in interstate 
commerce, the Westwood labor dispute falls under the jurisdiction of 
the National Labor Relations Board. Complaints were, therefore, filed 



PUBLIC ADDRESSES AND RADIO TALKS— 1 939 



185 



with the board, alleging discrimination by the company against employ- 
ees for union activity. The board investigated and issued orders to 
the lumber company to cease discriminations, to reinstate men who had 
been driven out of town and had not been re-employed, and to other- 
wise establish fair and peaceful conditions under which the board 
could call an election to determine whieli union should represent the 
employees as a collective bargaining agent. 

The board has not held this election, up to now, because it feels 
that peaceful conditions have not yet been sufficiently restored. 

Last mo)ith — on February 6th — the A. F. of L. Union, asserting 
unreasonable delay by the Labor Board in the calling of an election, 
struck for an immediate election and a closed shop, with restoration of 
the pay cut. Since then the mills have been idle. 

Smoldering animosities have again been raised to fever heat, 
attended by street fights, the gathering of mobs, and threats of intimi- 
dation and violence. Men affiliated with the A. F. of L. destroyed the 
C. I. 0. Union Hall. 

Men and women have come to me from Westwood, sick with 
anxiety for the very lives of workers and their families who were 
involved in this struggle. 

It looked as if there might be a recurrence of the violent events 
of last July. It looked as if I might have to declare martial law and 
install the National Guard. I sent officers of the National Guard to 
Westwood. Through them I pleaded with members of both unions to 
disavow and avoid violence and lawlessness. 

I asked both unions to send representatives to confer with me. 
They did so. We sat down together. We worked out a plan for a 
return to work. The principal conditions of the plan were that the 
company would agree to restore the former wage scale and that the 
National Labor Relations Board would agree to call an election within 
thirty days. 

The lumber company asserted that it was unable to restore the 
wage scale. I then suggested that an audit be made by a State agency 
to get at the facts that would enable the unions and their members to 
determine these matters for themselves. The lumber company agreed 
to my suggetsion. 

I am now proposing to the workers at Westwood a new i^eace plan, 
and asking them to vote upon this plan by a secret ballot, which will 
be conducted by the State Industrial Relations Department in the 
auditorium in Westwood, next Tuesday, March 2Lst. I ask the workers 
to vote upon the proposal that the Westwood mills be reopened on the 
ba.sis of the wage and working conditions obtaining on February 3d 
when the mills shut down, and upon the following conditions : 

First: That the lumber company's operations be audited as pro- 
posed. 

Second: That two A. F. of L. Union representatives and two C. I. 
O. representatives shall then jointly negotiate a wage agreement with 
the Red River Lumber Company. 

Third: That if, thirty days after the audit is completed, an agree- 
ment is not yet negotiated, then the matters in dispute shall be deter- 
mined by a Board of Arbitration of five members, one for each of the 



13—18527 



186 



STATE PAPERS AND PUBLIC ADDRESSES 



two uniojis, two for the Red River Lumber Company, and one to be 
appointed by me. 

Fourth: That if wa<^e rates be increased, the increase shall be 
retroactive to the date of reopening: the mills. 

I am sendinor my representatives to "Westwood to ask both unions 
to favor the holding of this election, and to conduct the election. I am 
writinp: a letter to each of the workers. I am asking them, for their 
own good and for the good of their families and in the interest of 
peace and good will toward each other, to vote yes on this peace 
proposal. 

I am not merely hopeful — I am confident — that the workers at 
Westwood will cooperate; that peace and good will can be re-estab- 
lishod. and that mill operations can be resumed. In other words, that 
conditions can be established under which the National Labor Relations 
Board will not hesitate to call an early election, and I shall urge the 
National Labor Relations Board to hold an election as promptly as 
possible. This will enable the Westwood workers to select for them- 
selves, by secret ballot, peacefully, and free from intimidation and 
coercion, the permanent bargaining agency for all employees. This 
is the best and only action the Governor can take. 

I feel certain that every good citizen of California shares my 
belief that it is the duty of each and every worker of Westwood — that 
he owes it to himself and to his family, to the State and to the public 
generally — to rise above factional strife, and to vote for this fair, just, 
reasonable and practical plan. 

I have dwelt at length on the subject of labor conditions in these 
two localities in the northern part of the State, because I deem it nec- 
essary that the people know of efforts being made to establish both the 
principle and the fact of peaceful settlement of industrial disputes. 
I feel that this is a faithful performance of my duty — a duty per- 
formed without discrimination or favoritism toward any group or 
interest. 

My time has expired. I will talk to you again next Sunday 
evening at the same time. I thank you, and bid you 
Good night. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 939 



187 



ORDER OF AHEPA 

Address delivered before the American Hellenic Educational Group, 
Hotel Senator, Thursday, March 25, 19)9 

Members and Friends of the Order of Ahepa 
Ladies and Gentlemen 

I take special pleasure at being: invited to address you sons of 
Hellen, that great mythical ancestor of all "true" Greeks. I take 
special pleasure because you and your ancestors, clear back into deepest 
antiquity, have made such a marked aud lasting contribution to the 
culture and the civilization we know today. 

These contributions make you a most valuable, and indispensable' 
part of the American people, of the great stream of American life. 
These contributions have a special significance today because of the 
most perplexing problems that confront the people. 

What are some of these contributions? 

It was the Dorian Greeks who taught the Mediterranean peoples 
the art of making, forging, and using iron. In fact, it was with their 
superior iron arms that they conquered and occupied the very country 
that is now Greece. 

The Ionian Greeks came later. They were the school teachers of 
their day. They taught the Mediterranean peoples letters, poetry, art. 
They introduced and made common the use of coined money. 

The Greeks established the Olympic games which have done so 
much to cement together the peoples of modern times; just as in the 
ancient days they exerted such great influence in unifying the Greek 
peoples. 

The Greeks raised painting, sculpture and the ceramic arts to such 
a high estate that their artists were signing their names to their works 
more than twenty-six hundred years ago; works which stand unexcelled 
to this day. 

The Greeks built temples and public buildings which, by sheer 
beauty of line and proportion, have strongly influenced all systems of 
architecture throughout subsequent ages. 

The Greeks jiroduced poets, writers, teachers and philosophers who, 
by their works, actually bring the fifth century before Christ closer to 
us of today than are the fifth, the tenth, or even the fifteenth centuries 
of the Christian era. 

The Greeks gave us Thales, the great Ionian astronomer and mathe- 
matician. He learned to calculate and forecast eclipses of the sun. He 
took the stars away from the gods and declared that they moved accord- 
ing to fixed laws. One of his pupils made a map of the world. 

Thales' studies set an example of mental discipline which alone 
can save humanity, and is far beyond the reach of many of our seats of 
learning of today. 

It was the ancient Greek, Pythagoras, who first declared that the 
earth is a sphere; that the earth is not the center of the Universe, nor 
even its most important member. 



188 



STATE PAPERS AND PUBLIC ADDRESSES 



The City of Athens alone, in one brief span of thirty-five years, 
produced some of the greatest men the world has ever knoA\Ti. Socrates, 
Zeno, and Prota<joras, the philosophers. Herodotus, the historian. 
Sophocles and Euripides, the dramatists. Phidias, the sculptor. And 
Pericles, the democrat. And many others. And the Athens of that 
day, some four hundred fifty years before Christ, was a city of less than 
a third the population of our capital city — Sacramento. 

This was the so-called "Golden A<re." Nor did that Golden Apre 
turn to brass. For centuries Greeks went right on turning out master 
minds. Plato's "Academy" continued for a thou.sand years. 

And Greece exported her new goods and her new ideas to the 
whole world of those days: utensils, furniture, interior decorations, 
drama and the theatre; arms, weapons and military tactics; noble 
ideals ; sane, sound ideas. 

They taught that wide-eyed, youthful world that man himself is 
the measure of things; that man himself could discover virtue, truth, 
beaut.v, and honesty within and by, and for himself. They set a mark 
so high that not all of the civilized world of even today, has yet 
reached it. 

But the Greeks gave us two otlier institutions, which, in view of 
the present .scene throughout the world, become even greater, even more 
valuable contributions to our civilization than any of the others I have 
mentioned. 

I refer to the secret ballot and to the institiition we call democracy. 

The Greek, Cleisthenes, invented the idea of voting. Think of it! 
A secret ballot twenty-five hundred years ago. He established a law 
providing for secret ballots to be taken on anyone who "endangered 
the public safety." 

The Greeks gave us not only the practice but the very word itself, 
Democracy, meaning "rule by the people." This was the kind of 
people the Greeks were. They had a Hair for politics ; a passion for 
democracy. 

I have knoATO many men and women of your nationality. From 
them, I know you have retained and kept alive this passion for democ- 
racy. You brought it with you — you and your parents, and their 
parents — when they came to America. Thus, you have fit readilj' and 
well into the American scene, the American scheme of things. 

These are days when this tradition, this habit of democracy, this 
passion for democracy, becomes one of the most important, one of our 
most cherished possessions. 

In this day when fascist philosophers have proclaimed the bank- 
ruptcy of our democratic institutions; in this day when dictators jeer 
at us who practice and believe in free press, free speech, and free 
a.ssemblage; in this day, we have the most urgent need for citizens who 
hold firmly to such ideals. 

We, in America, have a habit of voting and of abiding by the 
majority rule as established by our voting. But we also believe in and 
we practice recognition of the rights of minority groups. 

Like ancient Athens, we proudly boast that "not only in politics 
are we open minded. Without a scrap of jealousy, we tolerate peculiar- 
ities of all sorts in each other's daily lives; we have no objection to our 
neighbor following the bent of his humour. ' ' 



PUBLIC ADDRESSES AND RADIO TALKS— 1 939 



189 



But these very institutions, these institutions of freedom and 
democracy, are under most severe attacks on the part of a set of power- 
crazed dictators who, in their mad scramble of territorial expansion, 
have yoked their own people with censorships and suppressions, with- 
out parallel in modern times. 

I am disturbed to find their antidemocratic preachments being 
propagated and propagandized in these United States. 

Let us not be lulled into a false sense of security with the thought 
that antidemocracy can not take root here. 

Let us recognize that we are in the tenth year of the longest, the 
most severe economic depression in all modern history. Millions of 
men are out of work. Millions of families have lost their homes. These 
millions have been frustrated, many of them defeated, in their efforts 
to regain a hold on the economic bandwagon. 

Let us recognize that when people are defeated, when they are 
frustrated, they fall prey, all too easily, to all sorts of economic schemes, 
all sorts of promises of economic heaven. They are ready prey for 
charlatans, including the charlatans of antidemocracy. 

Unquestionably, our economy is undergoing chahges of far-reach- 
ing importance. It is quite impossible to forecast with confidence what 
our economic life will be like in America a generation hence. 

I hope the changes that do occur can be appraised as gains, as net 
improvements. But I believe, with everything that is in me, that these 
changes can not possibly be worth while if they are attended by a loss of 
our liberties, our civil rights. The changes can not be worth while if 
ordinary citizens may no longer be and act like free human beings. I 
shall be forever suspicious of any change which can be brought about 
only if we surrender our democratic processes, our right to speak out in 
open meeting. 

Thus, you see, this occasion affords me an opportunity to speak 
upon a subject that lies very close to my heart. You are American 
citizens, representatives of a national minority group.. At the same 
time, you have brought to America's democracy, your own democracy, 
born some twenty-five hundred years ago and still flourishing. It is 
like the acacia. It has deep roots. And like the acacia, you have 
struck deep and permanent roots into the soil of your new homeland. 

I feel that it is therefore peculiarly symbolical of the whole Ameri-. 
can ideal that I have this opportunity to speak to the people of Cali- 
fornia about American democracy and American liberties through the 
medium of addressing the members of that great American-Greek 
organization — The Order of Ahepa. 

Some of our institutions .show distinct signs of severe economic 
strain, due to the impact of long-continued economic depression and 
adversity. It promises to be fairly difficult, in the coming years of 
transition and change, to preserve these institutions. 

But no matter what happens in these coming crucial years, I 
bespeak, on your part, the most passionate adherence to the one great 
American institution on which all true Americans meet in common 
agreement. I refer to the institution of our American liberties, and 
civil rights, and democratic processes. 

I thank you. 



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LABOR DAY— 1939 

Address delivered in Civic Center, San Francisco 

Ladies and Gentlemen 

Labor Day eoiiics aecordinjr to tlie calendar on the first Monday in 
September. It so luippens tliat tliis year it also comes at the beprinnin? 
of another world crisis, the besriniiiiifr of an imperialistic war. Contem- 
plation of its possible extent, its horrors, barbarities, cruelties and 
devastating: consequences to civilization crowds all else out of our minds. 
Nevertheless, I believe you workers of California will want to hear from 
the Governor of your State on this day at least brief mention of our 
internal economic, social and political problems; and what we are try- 
infr to do about them. Tncideiitally, it may be declared that a civilized 
approach to the solution of similar problems in the rest of the world 
would mean cooperation instead of war. 

I can but barely sketch the outlines of the immediate program of 
my administration intended to carry forward the principles and policies 
of p:overnment declared in the platform on which T was elected. 

We are committed to tacklinp the problem of unemployment and 
its relief in a realistic, practical, and at the same time, humane manner, 
based on the premise that it is not jrood for either the miemployed man 
or the community to maintain him in idleness at the level of slow 
starvation ; based on tlie premise that every needy man, able and willing 
to work, shall have it; productive work that will enable him to maintain 
himself and his family in decency. We have already embarked on this 
pro<rram ; convinced that it will at once better the condition of the 
unemployed, better the condition of labor in <;eneral, and reduce the 
load now fallinjr on the taxpayer. 

We propose labor lepislalion alonjr the line of Federal laws, imple- 
mentinnr labor's hard-Avon ri<;hts of collective barfraininp:. We propose 
other labor measures recoenizinp and implementing: the new position of 
responsibility now occnined by labor. 

We propose farmer le<rislation and we are now en<rajred in admin- 
istrative policies to brin<j to those who work the farms returns to which 
they are entitled from the consumer's dollar paid for farm products, to 
the end that a<rriculture shall be restored, in California, as a true way 
of life, rather than an industrial feudalism restinpr on the backs of peons. 

We propose leprislation that will fit California into a broad program 
of social security and social insurance cnverin": not only old ap:e but 
also the ruinous continp-eiicies of unemployment, injury and sickness. 

We propose the widest application of public ownership to the gen- 
eration and distribution of electric power, and tlie conservation and 
distribution of water. As part of this program we declare the necessity 
for, and our determination to make the great Central Valley Project 
a 100 per cent public owner.ship business; so that it will operate for — 
not against — the general welfare. 

We propose legislation to reorganize and streamline numerous 
departments of our State Government ; in order that those departments 



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191 



shall work more efficiently and more economically, and perform better 
public services. 

We declare the necessity for and our determination to bring usury 
under control. 

We propose the reorganization of our tax structure ; in order to 
encourage home ownership and family life; in order to encourage 
rather than choke production ; in order to discourage laiid speculation 
and the wasteful exploitation of our resources. 

In the near future, I plan to call upon progressive labor, progres- 
sive farmers, progressive educators, progressive business and profes- 
sional men and women to help promulgate and present to the people 
for signature and placing on the ballot for adoption at the polls, 
certain constitutional amendments, required to carry certain parts of 
this program into effect. 

In all such progressive purposes, I feel certain of the support of 
all progressive elements of our society. I ask for that support and I 
shall expect the support of all labor. The program which we have set 
out to accomplish means progress in the reorganization of our indus- 
trial life and economy Avhich present conditions demand. 

However slow our progress may be ; however patient we may have to 
be ; however stubbornly we may have to stand ; however many mistakes 
we or the people may make through our democratic processes, including 
the use of the people's constitutional initiative, we must make up our 
minds that we shall continue to build, but that we can build only on 
sound and secure foundations. 

In the brief years since the previous European War, the people 
have barely started the reorganization of America. In the past few 
months, only the barest start has been made in California. 

The prospect that a new war may now stymie or delay this task is 
a pathetic, a tragic prospect. But it should serve, I hope, to help orient 
the American people toward the even greater task that now lies ahead : 
the task of world leadership, the task of setting an example of peaceful 
progress through cooperation and unity of purpose for the economic 
welfare and the social security of all. 

With our every thought, is a fervent prayer that we may be able to 
keep out of war. The value of keeping out of war lies not only in our- 
selves avoiding the horrors and the losses of war, but in the position we 
should assume when the peace comes. We should set an example of 
leadership; leadership and practical help after a destructive war has 
left whole peoples in hopeless despair. 

This new war is already about to plunge the European nations into 
destruction and barbarity far more ruinous than the World War of a 
quarter century ago. Can we wonder, therefore, at the scene of utter 
confusion and the panic which now shakes the world? 

Unfortunately, it usually takes a century or so for the people of 
any country to find out what their country has done. That is why we 
are only now beginning to understand the nature and true meaning of 
our own Kevolutionary War, our Declaration of Independence, our 
United States Constitution, oui- American Bill of Rights. That is why 
we are only now beginning to understand the contributions made by 
Jefferson, Jackson and Lincoln to America's folklore and political 
thinking. The World War is barely a quarter century in the past. 



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That is why we are still wondering about the part we played in it; 
wondering why we took any part ; wondering how we came to be drawn 
into it; wondering what, if anything, we accomplished, either for our- 
selves or for the people of the rest of the world by our participa- 
tion in it. 

It is timely that we should ponder seriously over these things. 
They should prompt us to ask the more pressing, the more immediate 
questions, "Can we keep out of this newer war?, this still bigger and 
more horrible war? How can we keep out of it?" 

These questions are of supreme importance to American organized 
labor. Coming at this time, they make this Labor Day perhaps the most 
significant in its history. 

' ' Can we keep out of War ? How ? ' ' 

These questions hold greater meaning to laborers and farmers than 
they do to bankers, and captains of industry and transportation. It 
would be mostly workers who would be called upon to face the guns of 
war. But into a war of defense of their country against foreign aggres- 
sions, to prevent imperialistic nations from setting foot on American 
soil or violating our Monroe Doctrine, American Labor should and 
would voluntarily respond to face the invaders' guns. No conscription 
would be necessary for the mobilization of the Avorkers of our country 
in such an event. 

Whether we are drawi into another war or not, as I view it, hope 
for America depends less and less upon the captains of finance; more 
and more upon the organized workers and farmers ; less and less upon 
Capital ; more and more upon Labor. 

We are speaking today of a World War of only 25 years ago. 
Ever since then there has been a constant succession of political crises 
growing out of economic imbalance and disintegration. Even now, 
here in this country, we approach the end of ten nerve-wracking years 
of economic depression and uncertainty. IMillions of men ovit of work. 
Millions of young peojile practically condemned, either for war's 
destruction or to lives of idleness and frustration. The perplexing 
paradox of want and misery in the midst of plenty. These are the 
evidences of the failure of our organizations; more especially our 
economic organizations. 

The time has come when men must act to repair this failure. If 
our older social organizations fail to act, then a social vacuum will be 
created into which some newer organization is bound to flow. Of this 
we may be very sure. History abounds with examples. 

In her early centuries, England had not one king, but many kings. 
Their inability to keep the peace and protect their people finally 
brought all England under one king. He was all-powerful. 

Then, as time went on, the all-powerful one-king idea failed. 
A social vacuum resulted. Reorganization became necessary. The 
Lords stepped in to fill the vacuum and England's Magna Charta was 
written. In it, the King had to share his power with the Lords. 

Things went along with little disturbance thereafter for quite a 
while — until science gave man the magnetic compass and taught him 
the arts of navigation ; until inventors improved and mechanized 
weaving, glass blowing, the making and forging of iron, and other 
mechanical arts. These were the early beginnings of the world of 



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193 



commerce and industry with which we are so familiar today. They so 
changed economic forces that the old governmental organization — the 
King- and his House of Lords — ceased to be a source of inspiration and 
positiA'e action. Their power declined. They could not cope with the 
new forces released by science and invention. Their failure to respond 
created a vacuum. Into tliis vacuum flowed a new organization — the 
so-called middle class — prototypes of our modern businessman. Out 
of this there was created a new legislative branch of government — 
the House of Commons. Through the House of Commons, the middle 
class shared the power and the responsibility of government. 

The winning of Magna Charta, the birth of the House of Com- 
mons; these were not exactly mild affairs. They were brought on by 
economic and social problems that old organizations could not solve. 
They were attended by many a governmental crisis. 

Apparently our world has now come to another such political 
crisis of economic origin. Old organizations seem to be paralyzed, 
unable to act. New organizations are flowing into the vacuum. 

These new organizations are the Avorking farmers of America and 
the organized wage workers; acting in self-interest; demanding their 
place in the American sun. 

Here are the conditions, here are the forces that will discover to 
labor and to working farmers the mutuality and close relationship of 
their economic interests. Here is the basis upon which they can and 
thej' will join hands. 

Here are the elements of unity, not only within the ranks of Labor, 
but in all America. 

This, I believe, gives a hint of the future, however dim its outlines 
may seem. This, I believe, describes the magnificent role that Labor 
will play in that future; a role loaded with responsibility, fraught with 
the dangers of failure, but, if successfully met, rewarded by pros- 
perity, power, prestige and peace. 

You must assume your share of responsibility for the preservation 
and expansion of our American civil liberties, our democratic institu- 
tions, processes and practices. Your best preparation for this part of 
your task is to maintain democratic processes, practices and methods 
in your own organizations. 

You share the responsibility for peace and progress. Labor's 
future is great, because I^abor's responsibility is so great. 

I thank you. 



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STATE PAPERS AND PUBLIC ADDRESSES 



WESTERN CONFERENCE ON GOVERNMENTAL 

PROBLEMS 

Address of welcome and reviarks on "Governmental Problems in the West," 
St. Francis Hotel, San Francisco, October 26, 19)9 



Mr. Chairman, Distinguished Guests 
Ladies and Gentlemen 

It affords nie the greatest pleasure, personally, and on behalf of 
the people of my State, to welcome to this Western Conference on 
Governmental Problems the Governors and other officials of the eleven 
Western States, which, together, comprise one large unit of these great 
United States. A natural unit because we have so manj^ interests and 
problems in conmion ; because we enjoj^ a remarkable unity of social 
and spiritual outlook; and because we are the inheritors of the tradi- 
tions, the free institutions, and the liberal principles that have always 
characterized the pioneer west. 

Although I was more than merely glad to follow the suggestion 
that the Governor of California issue this invitation, in the hope and 
anticipation that you would find it convenient to gather here, the 
major credit must be accorded to Mr. Frank Bane of the Council of 
State Governments. In him, and in the council, I am sure we all find 
a most competent and sincere agency: always bent upon the construc- 
tive service of modernizing and simplifyin.g the administration of local 
and State Goverimients. Mr. Bane has been pursuing his objective 
of a Western Conference ever since I took office. I, for one, feel he 
has performed a signal public service in having finally brought us 
together to compare notes and talk things over. 

The arrangements for this conference and its agenda have been 
made by ]\Ir. Bane and a California committee appointed by me headed 
by Mr. M. Mitchell Bourquin of this city with Mr. Richard Graves, 
Secretary of the League of Municipalities of the State of California, 
as executive secretary. Any success we may achieve in this conference 
must be duly credited to them and the others who have worked so hard 
to prepare the way so that we may confine our entire attention to the 
business in hand. 

According to the agenda, I am to speak on and to the question of 
"Governmental Problems in the West." This, it seems to me, is so 
very broad that it comes more nearly being the proper title for the 
whole conference. If I were to cover the ground fully and compe- 
tently, I would be the one and only speaker and would take not less 
than the two and one-half days assigned us, and our conference would 
be a very dull affair indeed. 

Therefore, I shall confine my remarks to a few observations indi- 
cating my own philosophical approach to the problems of government, 
and to the mere mention of some of our more acute problems and the 
briefest discussion of some of these. 



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195 



It seems to me that the problems of s^overnment stem from, grow 
out of and can not be considered apart from the problems of the people 
themselves. If we try to separate the one from, and discuss it without 
reference to the other, we shall be talking in a vacuum and without 
effect. Therefore, I shall talk directly about the problems of the 
people, which their governments must solve. 

As I view it, the number one problem of the people is the economic 
problem; which is nothing more nor less than the problem of making 
a decent living. It has become a horribly uncertain and difficult 
problem. Our economic system has come to some sort of impasse and 
we find ourselves in the paradoxical situation of having all the resources 
and means for producing plenty for all, but lacking the mechanism, 
the means, the wit, to distribute that plenty. 

In this economic blind alley, we find a wall of concentrated wealth, 
privilege and monopoly practices, flanked by a vast array of entrenched, 
established institutions and organizations which depend, for their force 
and effectiveness, upon a folklore and ideology which grew up in, and 
out of, another day — the day of scarcity. Huddled in this alley, 
groping for a way out, we find elder citizens stripped of their savings 
and frantic with fear of poverty and insecurity ; ten million able-bodied 
workers unable to find work in our farms and factories which have 
become so efficient and productive that we find ourselves maintaining 
a fifth to a fourth of our population in enforced idleness ; millions of 
boys and girls, fre.sh from schools Avhere they learned all about democ- 
racy, and equality, trying to set foot on the bottom most rung of our 
economic ladder ; millions of small business men and women trying to 
hold onto their comfortable middle-class thoughts about competition 
being the life of trade — in a jungle of chain stores, monopolies and 
fixed prices; and millions of small scale farmers trying to maintain 
American agriculture as a respectable and secure way of life in compe- 
tition with industrialized, mechanized and collectivized farming by 
banks and corporations ; labor unions struggling desperately to win for 
Avorkers their honest and just share of the Avealth they create. 

The whole scene is remarkable for its paradoxes and conflicts which, 
by any rational standards, are inexcusable. We have millions of people 
needing medical attention who can not have it, even though we have 
plenty of half-idle doctors and dentists. We have never had so many 
hungry, ill-clad people nor so many bulging warehouses, bulging prisons 
and bulging hospitals for the mentally sick. We have iiever had so 
many children needing milk nor so many dairy farmers struggling to 
dispose of their milk at fair prices. We have never had so many 
unemployed in the face of so much work needing to be done. 

On top of it all we have never had so much unused knowledge, skill 
an wit. Small wonder, then, that we have never had so much frustra- 
tion, mental distress and crime. Small wonder, therefore, that our 
governmental institutions are so strained at the seams. 

If there is anything at all that an economic sy.stem must do, or 
else, it is to instrument the well-being of the people — all of them, at 
least, who are employable and are willing to work. And that is just 
Avhat our present system is not doing. At least it is not doing it suc- 
cessfully. Our economic system is not at all easy to describe but its 
philosophy is rather well epitomized as a system of laissez faire — that 



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is, "let thingrs be as they are." It depends upon the automatic prompt- 
ings and controls of capitalistic exploitation in an atmosphere of free 
enterprise ; or such is the arfrument of its defense, first stated by Adam 
Smith who held that the well-being of all was best served in a society 
where the individual was free to and did pursue his own interest ; free 
to do just as he pleased with his land, his capital, his money; free to 
drive the best bargain he could exact. That was 163 years ago. Thomas 
Jefferson's thinking followed the .same pattern when, a few years later, 
he observed that "that government is best which governs least." 
Laissez faire — let men do as they please. 

But the trouble is that the automatic workings of our system are 
no longer automatic. Wealth is so concentrated, monopolies are so 
entrenched, that competition is stifled and initiative discouraged. Our 
anti-trust laws have failed to prevent the evolutionary development of 
monopolies. Attempts to break them up and enforce competition 
between their component parts have, for the most part, proved futile 
and ineffective in results, even when successful as to form. 

And so we witness still another paradox ; rational people demanding 
that government "do something" about this, that or the other thing, the 
while they demand that government keep its nose out of business; 
otherwise rational men demanding that the budget be balanced, the 
while they also demand that government stick its nose into business to 
the extent of doing something special for them — something that will 
increase the scale of government spending. 

It is well to keep this in mind when we hear men talk loosely about 
government in business, government inefficiency, etc. It is well to 
keep in mind that although our laissez-faire economy served us fairly 
well up to about a quarter century ago, when it drew us into a world 
war, it did so very largely because of government subsidies. Ever since 
the very birth of our Nation, the forces of expansion, development and 
exploitation have been fostered by doles, subsidies and tangible public 
aid of every sort. 

Free land for soldiers; free land for the settling; mineral wealth 
for the mere taking; land and cash for the railroad builders; power 
sites for the asking; patent rights for inventors; protective tariffs for 
our manufacturers. 

And now, in more recent years, we have held our railroads and 
utilities free from the ruinous competitive practices of the open market. 
We pay heavy subsidies to encourage aeronautics; to encourage the 
search for scarce minerals and metals; to maintain the building and 
construction industries as going concerns ; and to assist private bank- 
ing by guaranteeing their deposits and loans. To these we have added 
a vast miscellany of government interventional measures; fair trade 
laws, .social security laws, labor and safety standards, collective bargain- 
ing; all designed to save business from its own irrational and destruc- 
tive behavior. 

These measures, when adopted, were condemned as "Government 
in business." But it is well to point out that every one of them came 
into being, not at the instance of politicians and so-called demagogues, 
but because of the powerful and effective insistence of first one and 
then another section of our business and social communities. 



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Too much governinent in business may indeed have bad effects, but 
its critics are entitled to be reminded that effects always have causes; 
that they might more constructively address themselves to causes. 
When critics do that, they become statesmen. 

Now to sum matters up at this point : 

First : Our economic system is not delivering the goods. 

Second : This failure subjects all of our institutions, social, eco- 
nomic, religious and political, to the most severe strains and tests. 

Third : The price of enduring government is that of making our 
economic system work well and rationally. 

I believe it is now very generally agreed that this is a proper 
objective of government : to make our economic system work. 

And here in America, as I view matters, no means to this end are 
either workable or justified ; no means to this end will meet the appro- 
bation of the people except peaceful means, the full retention of our 
civil liberties and democratic principles, practices and processes of 
which the American ballot box is the everlasting sj^mbol. 

This brings me to the point of mentioning some of the problems 
which are pressing hardest for solution. It is with no thought of 
excluding any important problem that I list the following : 

1. The unemployed — what to do with them. 

2. Old age pensions. 

3. Public ownership. 

4. Labor. 

5. Maintaining civil liberties. 

6. Agriculture. 

7. Land use. 

8. Conservation. 

9. Eevenue. 
10. Planning. 

Unemployment 

The primary effect, the primary problem growing out of the fail- 
ure of our economic system to deliver the goods, is that of unemploy- 
ment. It is my own sincere conviction that if we can induce the 
reemployment of the unemployed, we shall, almost automatically, 
eliminate or greatly mitigate a long list of contingent, dependent 
problems, among them high taxes, bankrupt governments, men too old 
at 40 to get work, employment for youth, a decent return for working 
farmers, the depressing effect of unemployment upon wages and 
organized labor's attempts to maintain wage scales, working conditions 
and collective bargaining. 

The State of California spent over forty million for unemployment 
relief last fiscal year. This is a terrifying figure and, if we did not 
have this burden, we could balance our budget and retire our floating 
debt without enlarging our tax base. But, even so, our relief is scaled 
to the barest subsistence and there are thousands of families needing 
relief whose bread winners can not quite qualify under present laws, 
rules and regulations. 

"We have been wrestling with this condition for some years. We 
have reached the conclusions that we must help the involuntarily 
unemployed; that the dole and other relief methods of the past and 



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present are not only too costly but ineffective and impractical; that 
more practical and at the same time far less costly methods must be 
devolved and put into operation. 

We have only lately completed exhaustive studies, undertaken 
not from the viewpoint of relievinj^ the worst effects of unemployment, 
but from that of reemployin<? the unemployed. And we have deter- 
mined upon a definite program to that end. 

Mr. John R. Richards, our Director of Finance and Chairman of 
our Reemployment Committee, w-ill discuss this study and the resultant 
plans and recommendations as a part of tomorrow's program. There- 
fore, I shall not go into details beyond asserting my conviction that 
it points the way to balanced budgets, to adequate relief, to reemploy- 
ment, and, above all, to the rehabilitation and restoration of the 
morale of scores of thousands of workmen and their families who have, 
for years, suffered worries, frustrations and discouragements that have 
made life seem to them Avell nigh hopeless. "We do not offer this plan 
as any Utopia. It rests wholly upon the principle that men must work 
and produce in order to live and they must be given the opportunity 
to do so. Our plan is to put unemployed men and women in practical 
working contact with land and productive equipment. 

Old Age Pensions 

One of the most spectacular phenomena produced in the ten depres- 
sion 3'ears now just closed is the organized demand for old age jieusions. 
California is oiu* of the principal battle grounds of the pension move- 
ments. A very large group of our citizens are quite seriously intent 
upon making California a proving-ground for their theory that State 
warrants, redeemable in lawful money if enough tax stamps are 
attached, will circulate as money and induce prospertiy if distributed 
as pensions to nonproducers over age 50. Indeed, we are in the very 
midst of an intensive election campaign to determine w-hether the plan 
shall be instituted as a part of our State Constitution with provisions 
that such unstamped warrants shall be received in payment of taxes 
and other obligations to State, county and municipal governments. 
It is not necessary to here describe or brand either the virtuous 
objectives or the fallacies of the plan. But it must be realized that 
the conditions producing the demand, and the demand itself for ade- 
quate old age pensions, are very real indeed and can not be desregarded. 
As matters stand now, the State giving the more generous old age 
assistance is penalized for its generosity by selective immigration by 
elder citizens hoping to qualify for its benefits. Obviously, only a 
national pension plan, federally financed and operated, can be free 
from this serious objection. But until an adequate Federal plan has 
been adopted, the individual States, in all fairness, can do no less than 
render the most generous old age assistance their finances will permit. 

Public Ownership 

Some sixty-five j^ears ago, Jenny Lind and electric lights were 
P. T. Barnum's main circus attractions. The development and sui)ply 
of electric power since that time lias been one of man's major advances. 
In recent years, most spectacular water conservation and power devel- 
opments have been undertaken in our western States. Most notable 
of these are the Grand Coulee, the Bonneville, the Boulder Dam and 



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199 



the Central Valley Projects. Because of their great cost they were 
possible only by and because of the help and cooperation of a liberal 
and far-seeing- Federal Government. 

It is now up to the several states and local communities to prepare 
to use the power from these projects. In the west we do not have all 
of the materials and facilities for the making and forging of steel. 
In this, the eastern states enjoy some advantage over us. "We can and 
we shall overcome this advantage by utilizing to the fullest the enor- 
mous power resources now placed at our disposal by the Federal 
Government. 

I am one of a great and growing body of citizens who are con- 
vinced that we can take this fullest advantage of giant power, of the 
most modern techniques by eliminating high interest rates and private 
profits; a combination that is possible only under public ownership. 

Tacoma, with the lowest municipal electric rates in the United 
States, and Seattle are outstanding examples of the possibilities and 
benefits of public ownership. 

Los Angeles enjoys municipally owned and distributed water and 
power at the lowest rates for any city of like size. And at these rates 
the water and power bureau is pajdng off the cost of acquiring and 
building her plant and making substantial contributions to public 
charity and to the reduction of taxes. All of this at no cost to the tax- 
paj'er except in his capacity as a utility rate payer. 

Cheap water and cheap power; these alone account for Los Angeles' 
extraordinary growth as a great manufacturing and industrial center. 

The Central Valley Project, now under construction, will add 
enormously to the power resources of northern and central California. 
We have plans to facilitate the distribution of this power, not only to 
industry, but also to the farmers of the Sacramento and San Joaquin 
valleys, at much less than present rates. Cheap power means cheap 
water. Cheap water spells prosperity for the farmers where light rain- 
fall and lowered water tables have forced a reversion of hundreds of 
thousands of acres of fertile lands to desert. 

All this can be accomplished only through a broadly applied, well 
integrated system of public ownership. That is our plan here in Cali- 
fornia. We are now engaged in the fight for its accomplishment 
against the well known methods of obstruction and delay practiced by 
priA^ate interest engaged in public utility business. 

Labor 

Not the least effect of ten profitless years and the sharpening of 
the economic problem has been the new and stronger and more com- 
manding status of labor; moie especially organized labor. The rise 
of industrial unionism is most significant, being a natural response of 
labor organization to giant industrial units with their labor-saving 
machinery, standardized, repetitive operations and mass production ; 
and the other far-reaching changes that have been going on in industry 
itself. 

But, to me, the rise of labor has a larger significance. We find its 
historical counterpart in the rise of the middle-class in the Seventeenth 
and Eighteenth centuries with the advent of capitalism and the institu- 
tion of private property. Their rise was a long struggle for respect- 



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ability in a world where the pursuit of business, commerce, manufac- 
turing and trade were beneath the dignity of the "best people." 

Labor's rise is likewise a struggle for respectability in a world 
largely dominated by business men and middle-class thinking. As I 
view it, we can not .serve society by denj'ing labor's claims. We can 
serve society extremely well by supporting legislation recognizing these 
claims. These include such measures as the National Labor Relations 
Act, mediation and arbitration laws, job insurance, old age security, 
collective bargaining, minimum wage laws. 

Civil Liberties 

Thomas Jefferson was three thousand miles away during the 
Summer of 1787 while the United States Constitution was being 
framed. Nevertheless, he was most potent in securing its adoption. 
Although he did not per.sonally approve it in all its parts, he urged the 
Virginia Legislature to ratify it. But he made his endorsement con- 
tingent upon assurance that a Bill of Rights would be added by amend- 
ment and he submitted a draft thereof. 

AVith but slight change, Jefferson's draft became the first ten 
amendments of our Constitution. Together with the abolition amend- 
ments, they constitute the American Bill of Rights, the basic statement 
of the civil rights of all citizens. They are that particular part of the 
Constitution men will struggle hardest to preserve, defend and extend 
with a vigilance that is constantly needed to prevent their loss. We 
have only to look abroad where the inability of peoples and their gov- 
ernments to adjust themselves to evolutionary economic changes have 
resulted in the loss of the elemental individual rights and liberties that 
give man dignity. And wc have only to look about us here at home 
to realize the recent economic changes that have occurred and that we 
must accommodate and adjust ourselves and our institutions to these 
changes or lose our liberties. We may well ask ourselves, "If we lose 
our civil liberties, will America be any better land to live in than 
Totalitaria?" 

And we most assuredly shall lose our liberties if we acquiesce in 
their violation. Jeffei'son, the father of our Bill of Rights, believed 
they would have to be fought for about every quarter of a century in 
order to give them life, vigor and meaning to each generation. 

Let us therefore resolve that no matter what change our other 
institutions may undergo, we shall forever defend and preserve our 
civil liberties, resisting their violation on every front. 

Agriculture 

A most spectacular example of the effect of economic changes 
during the past quarter century is seen in the lower level to which the 
American small farmer has fallen on the economic scale. With other 
countries having become more self-sufficient agriculturally, his foreign 
markets have been wiped out or greatly reduced. With tariff protected 
goods that he must buy and unprotected markets in which he must 
sell, he, his family and his laborers, have been the natural prey of the 
favored elements of our society. With mortgage and tax foreclosures, 
farm lands tend to settle more and more in the hands of corporations, 
banks, insurance companies and speculators. As if this absentee- 



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201 



ownership were not bad enongii for the community, the newer, more 
financially able owners have introduced industrial, labor-saving methods 
and collective farming, financed at low interest rates. Against such 
combinations, the small farmer, whether he be owner or tenant, has 
but little chance of survival. About 58 per cent of the productive 
farm lauds of California consist of commercialized farms. 

Federal crop control payments were severely criticized as uneco- 
nomic and un-American. But they were no worse — and no better — • 
than the "crop control" exercised by industry. Surely it is no worse 
to not raise cotton, corn or wheat for which there is no adequate market, 
than to not produce automobiles for which there is no adequate market. 
But good or bad, crop control payments were thrown out by the 
Supreme Court. As an alternative way to help the farmer, the Federal 
Government now pays him to prevent soil erosion, to build up his soil 
i'ertility, etc. A generation ago this would have seemed the purest 
folly. Even today, it seems a round-about way to give practical help 
to the farmer. Looking at it squarely, it is a Government subsidy. 
But Government subsidies are a habit with us. It is surely just as 
proper and effective to subsidize farmers as bankers, industry and the 
merchant marine. I believe it is more so. 

But even so, we have not gone far enough. 

Here in California, we are working on still other fronts for the 
small farmer. We have prorate laws for crop marketing — but their 
administration was monopolized by the big farm corporations, with 
definite injury to the small farmers. We are by way of changing this 
condition. We also propose to make mortgage loans available to the 
dirt farmer at low interest rates; rates which will comport with the 
essential permanency of his security and the fact that the dirt farmer 
and his family are basic elements of our society. We also propose to 
make crop loans available to small farmers at low interest rates. These 
loans will leave him free to sow, cultivate and harvest, to market his 
crops to best advantage to himself ; free from domination by the proc- 
essors, and free from the brokers and other middlemen who stand on 
the side lines, waiting to exact their tolls for crop loan contracts which 
not only tell him how he shall conduct his business and how much he 
may pay his farm laborers, but strip him of all chance of realizing a 
profit for his year's labor. 

We propose to expand the application of our agricultural market- 
ing laws — to the end of reducing the wide margin between the prices 
the farmer receives and those the consumer pays. We propose in our 
reemployment program to provide for the exchange of surplus com- 
modities produced by the unemployed for products of our farms for 
which no cash market is available. 

The plight of the American dirt farmer, especially in the West, 
is bad. Of all the urgent problems pressing for solution, none is more 
serious, none is more urgent, none is more complicated than that of 
agriculture. We can not solve our other problems unless we solve this 
one. We can not shirk or disregard it except at grave peril to society. 

Land Use 

Still another question for consideration is whether our previous 
policies in the disposition of State lands and in the matter of land use 

14—18527 



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STATE PAPERS AND PUBLIC ADDRESSES 



and land tenure, should not be changed in order to make sure that these 
lands shall be put to beneficial use and made available to actual settlers, 
instead of their titles passing into the hands of speculators. Reserva- 
tion of a right to reversion to the State, of land which the grantee or 
his successor shall fail to use for home or to cultivate or otherwise 
place to beneficial use — in accordance with the terms of the grant, 
would serve such a policy. 

One spectacular feature of this problem is found in the extra- 
ordinary number of parcels of land which have reverted to the State 
through tax delinquencies. 

Heretofore, the effort has been to sell these parcels in order to 
restore them to tax rolls. But here in California and in other states, 
I dare say, there is more such land than the market will absorb. 

The causes of this condition are many and complicated. But it is 
principally the effect of land speculation. The object of land specula- 
tion is to hold it out of use waiting higher prices. High prices for 
land are bad for the community; bad for farming; bad for home owner- 
ship ; bad for normal family life. 

Of course, much of this tax-reverted land is submarginal. But a 
great deal of it is good and usable. 

It is my belief that we should not try to restore these lands to 
private ownership except for bona fide occupancy and beneficial use, 
and not for speculation by cash sales to those who are merely looking 
for a higher cash market. 

Conservation 

All of the western states are under a most urgent necessity to 
conserve their natural resources. 

"We now find to our dismay that far too much of America's "Suc- 
cess story" has a sequel ; of eroded farm lands gutted by flood, cut-over 
and burned-over forest lands, impoverished soils, lowered water tables, 
Ashless fisheries, gameless hunting grounds, grassless grazing lands and 
a dust bowl with its thousands of deracinated families wandering up 
and down the country searching for land where they might once more 
take root. 

Time does not permit a discussion of our predicament. Moreover, 
this company scarcely needs the instruction. 

But there is one problem of the greatest significance to our coast 
and of only a little less significance to the interior states. I refer to 
California's oil and gas reserves. 

Here are the only effective liquid fuel resources west of the Rockies. 
Here is the only effective oil and gasoline supply for the coast states 
and Alaska. Here is the only effective fuel supply for Navy and other 
national defense operations in the Pacific. Just at present, California's 
oil fields are the source of liquid fuels for the entire Pacific area. 

Our remaining, unexploited oil deposits are, of course, limited. 
Oil is irreplaceable. 

These facts warrant the most drastic steps to prevent waste and 
stabilize our utilization of oil and gas resources, not only for their 
conservation but for the benefit of our domestic consumers, in terms 
of reasonable prices for their products. 



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It should therefore interest every one of the western states that 
California is right now debating a ballot measure dealing with this 
problem. We vote on this measure on November 7th. I am urging 
the people to vote yes on it. 

If adopted, it will give the State an interest in and control over 
the rate at which oil and gas shall be produced in California; powers 
to control and prevent waste in their production and to prevent produc- 
tion for sale in foreign markets. Our interest will cover the prices at 
which oil and oil products are delivered to our domestic consumers. 
We shall be very interested in the uses to which California oil is put 
when it moves into foreign commerce. 

My own view of this matter is that we do not have enough oil 
to permit its export for any purpose except our own national defense. 

Every one of the western states wants assurance of an adequate 
supply of oil and oil products for the longest possible time at the 
lowest possible prices. I rest assured that this want will develop the 
strongest support of my view. 

Revenue 

Not the least acute governmental problem, and one which is shared 
by all states, is that of revenue. Unquestionably, depression increases 
both the size and the burdensomeness of the tax-load. And there are 
many who assert that heavy taxes are the cause of depression. My 
belief is that this is true or false according to the kind of tax. 

If a tax chokes consumption ; if it discourages home ownership or 
farming ; it definitely contributes to depression. Sales taxes and exces- 
sive taxes on improved real estate, improvements and personal prop- 
erty, are of this kind. 

But if a tax be scaled and levied according to ability to pay, it 
definitely contributes to recovery because it tends to equalize the ter- 
rifying inequality of income which lies in the roots of our trouble. 

Last year (fiscal year ending June 30th, 1938), 27 per cent of 
all government revenue, Federal, State and local, derived from prop- 
erty taxes; 24 per cent from consumption taxes, and only 21 per cent 
from ability to pay. The remaining 28 per cent derived from borrow- 
ings and miscellaneous tax sources. 

If we would revise our tax structures to collect about: 
18% from property taxes, 
16% from consumption taxes, and 
45% according to ability to pay, 

I venture to assert that we would experience a most remarkable and 
salutary improvement throughout our entire economy. 

This view is strongly supported by England's experience between 
wars. Even before embarking on her rearmament program two years 
ago, England levied 58 to 60 per cent of all her taxes according to 
ability to pay; that is, by income and inheritance taxes. Harder hit 
by war, harder hit by world depression, with far heavier per capita 
taxes than we have, England has a better record for budget balancing 
than ours of recent years. 

Certain difficulties attend the attempt by any one state to up 
its income and inheritance taxes; the theory, and to some extent the 



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fact, being that wealth takes flight from the state having the highest 
income tax. It would be very simple to let our Federal Government 
levj' all income and inheritance taxes and to distribute a fixed per- 
centage back to the several states, to each according to population. 
This would simplify tax collection, conform with sound economics and 
serve justice. I, therefore, urge it for the careful consideration of all 
our Western States. 

Planning 

It is not necessary to list or appraise the causes in order to recog- 
nize that the problems confronting government are far more numerous, 
far more complex, and infinitely more difficult than those of a genera- 
tion or two ago. Every day brings the demand that government 
intervene in, assume control, or even take over this or that business; 
the demand that the blanket of public subsidy be stretched to cover 
additional fields of economic and .social endeavor. 

However meritorious these demands, however urgent, however 
potent the forces behind them, these demands are over-taxing the 
digestive capacities of government. The courts, the legislatures and 
the executives of government are literally jammed. But even if the 
channels of government were not clogged, on many a demand we lack 
the full information that is absolutely necessary if we are to act wisely. 

This situation gives deserved prominence and importance to the 
governmental research agencies and state and regional planning boards 
which have come into being during the past few years. They are now 
proving their value. In fact, almost without our suspecting it, they 
have become literally a fourth branch of government — a vital and 
necessary service branch for the other three. 

Foremost among these agencies is the Council of State Govern- 
ments, headed by Mr. Frank Bane, to whom our principal thanks are 
due for this conference. 

Here in California, at the University, we have a most valuable 
school of Public Administration headed by Dr. Samuel C. Max. This 
school has already produced a surprising array of research studies 
covering many problems of government. Their reports are available 
in printed and mimeograph form and might easily be of great value 
to executives of other states as they are to us. 

California also has a State Planning Board which is undertaking 
surveys and studies of resources, population, land use, tax-delinquent 
lands, traffic flow, and many other subjects needing illumination for 
purposes of legislative and executive action. 

It is the purpose of our state administration to raise these research 
and planning agencies to the high potential of usefulness that new 
problems impose upon them. We shall urge and encourage them to 
cooperate with similar agencies in our sister states. We solicit their 
reciprocal cooperation, all in the belief that we shall discover the 
mutuality of our interests and establish unity of purpose, program 
and action. 

Once again I state my gratification and that of all California, that 
this meeting could take place, that it is taking place, and that it is 
being held in our State. 

Once again I welcome you. 

I thank you. 



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205 



FRIANT DAM 

Ground breaking celebration commemorating the start of construction of the 
Friant Dam of the Central Valley Project, Friant, California, 
November 5, 1939 



Ladies and Gentlemen 

This is an hour of great exaltation. You men and women have 
watched your wells go dry. I know what that means. For twenty 
years, you have been dreaming, planning, skimping and saving, fighting 
against the most discouraging odds — looking forward to the realiza- 
tion of this great project. I know what that means too — because, 
throughout my adult life I have worked for public ownership and the 
public development and conservation of our natural resources. I am, 
therefore, intensely proud and deeply grateful that it has fallen to my 
lot to participate in your festivities and share in these ceremonies, as 
Governor of our great State. 

We are gathered here today, not merely to ceremonialize the start- 
ing of work on Friant Dam ; but to sound a new note of hope and 
assurance for the farmers of the San Joaquin. 

Ever since the severe let-down following the World War, almost 
year by year, the working farmer of America has had more difficulty 
making a living. He has become the easy prey of financiers, packers, 
processors and other middlemen. Mortgage foreclosures have accom- 
plished an unhealthy concentration of land ownership. Matters have 
reached the point where the small scale farmer can keep going only 
at the expense of depleting his soil, and exploiting his laborers and 
even his own family. 

It is not necessary to here recount the long and very complicated 
story of how all this came about. But it is necessary to know that 
story in order to understand the present; in order to understand that 
something had to be done and that a great deal has yet to be done to 
re-establish farming as a secure way of life. 

We can not continue to have popular, liberal and democratic 
government; we can not hope to maintain our civil liberties; we can 
not expect to maintain the American way if the working farmer of 
America is to be pushed down to the level of peasantry and the farm 
laborer is to become a mere serf or peon. 

California is deeply concerned with this problem. A part of the 
answer is found in the Great Central Valley Project which is an 
attempt on the part of American liberal government to enter into a 
partnership with agriculture; a partnership to which government's 
contribution will be a vast, far-flung, carefully engineered public work, 
designed to protect the farms of the Central Valleys from floods, to 
replenish their depleted underground water reservoirs and to bring 
them large additional dependable supplies of water — cheap water — 
and, in addition to all this, to make available to the farmers, large new 
sources of hydroelectric power at rates so low that they can afford to 



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use it; not only for pumping water but generously for every other 
domestic need. 

As in every partnership, the success of this one depends upon our 
ability to cooperate. 

The Federal Government is financing a major share of the cost, 
and doing the work. Your State Government is cooperating by supply- 
ing engineering data, plans and services, and by facilitating outlets for 
the sale of water and power at the lowest costs commensurate with 
sound financing. 

The degree of success of the Central Valley Project; the final 
measure of the benefits realized from it by the farmers, will depend 
upon the cooperation of the communities comprised by the Central 
Valleys. 

I want to make quite clear just what T mean by this. 

It is my firm conviction that the lowest costs for the major benefits 
of the Central Valley Project can be realized only under a comprehen- 
sive system of Public Ownership. Public ownership of every phase of 
the conservation, diversion, storage and distribution of water; public 
ownership of every phase of the generation and distribution of electric 
power. 

Your State administration has made, and will continue to make, 
every possible effort to secure passage of legislation enabling and facili- 
tating public o-\^Tiership. This will make easier the formation of public 
utility districts and other cooperative enterprises whereby the farming 
communities of the Sacramento and the San Joaquin Valleys can ensure 
getting Central Valley water and Central Valley power at the lowest 
possible costs. As is now well knowTi, these lowest costs are not pos- 
sible under private ownership and exploitation so long as the rate 
payer has to support: the inflated valuations of utility properties now 
enjoyed by the private utility companies; their capitalization of the 
right to exploit the rate payer as a valuable intangible asset; the high 
interest rates these companies pay for their borrowed capital ; the high 
charges for so-called expert management paid by the private utility 
companies to their parent holding companies; and the very comfort- 
able dividends these companies pay to their stockholders, most of whom 
live well removed from these valleys. 

The farmer's margin of profit has become so very narrow that he 
can no longer afford the luxury of the private ownership of his water 
and power utilities. 

Before long the people of the northern end of the Central Valleys 
will enjoy cheap power from Shasta Dam. You in the southern end 
should have it, too. This will reduce the cost of pumping water. It 
will give the farmers, in fact, all the people in the south end, all the 
comforts they can so easily afford with cheap electricity. 

To do this, it is absolutely necessary to organize municipal utility 
districts for public distribution of power. 

We have a program of action which requires adoption by our 
liCgislature. It will enable your State Government to assist you ener- 
getically in forming effective local utility di.stricts for the distribution 
of power, and thus make electric power available to yon at the low 
rates you need. 

I hope you will work for and support passage of this legislation. 



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207 



And now I am given the privilege of presenting on this program, 
our most distinguished guest, the member of the Cabinet of the Presi- 
dent of the United States who has charge of and who, from its incep- 
tion, has directed this great development as a Federal project. 

No man has ever occupied that office with a more perfect under- 
standing of our problems, or stronger grasp of sound national policies 
for their solution, than our distinguished guest. 

Personally, I regard the Honorable Harold L. Ickes as the greatest 
Secretary of the Interior our United States of America has ever had. 
I am proud to present him to you. 



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STATE PAPERS AND PUBLIC ADDRESSES 



FARM BUREAU FEDERATION 

Address to the annual convention, San Diego, November 14, 1939 

President Wiser, Distinguished Guests, Members and Friends 
of the California Farm Bureau Federation 

Ladies and Gentlemen 

Last year \o\\ were kind enonprh to invite me to address your 
Sacramento Convention. I very mneh wanted to, but the extraordinary 
press of duties fallinpj upon a Governor-elect made it quite impossible. 

However, you have now had nearly a year to observe my actions 
as Governor. Actions speak louder than words. Therefore, that which 
I have to say to you this evening will have more meaninj? than if I 
had said it to you a year afro. At any rate, I am very jjrateful that 
you again invited me to address you. I am i^lad to be here. 

I assume that you want me to discuss the "farm problem." Since 
my office requires that I observe and discuss many problems : Indus- 
trial, commercial, financial, transportation, labor, legislative, judicial, 
executive, administrative, taxation, economic and social problems — 
to make no mention of oil and pensions, you will understand perfectly 
and accept the fact that my discussion of farm problems is from a 
multiple viewpoint. Naturally, I must not only see your problems, 
from your viewpoint, but I must also see them in their larger setting ; 
in their relation to and effect upon the problems of all other groups 
within our society. Because, collectively, these problems are the prob- 
lems of government. 

Another way of saying it is that the problems of government stem 
from and grow out of and can not be considered apart from the prob- 
lems of the people themselves. Tf we try to separate the one from, and 
discuss it without reference to the others, we shall bo talking in a 
vacuum and without effect. Therefore, I shall talk directly about the 
problems of the people, which their governments must solve. 

As T view it. the number one problem of the people is the economic 
problem ; which is nothing more nor less than the problem of making 
a decent living. Tt has become horribly uncertain and difficult. Our 
economic system has come to some sort of impasse and we find our- 
selves in the paradoxical situation of having all the resources and 
means for producing plenty for all, but lacking the mechanism, the 
means, the wit. to distribute that plenty. 

In this economic blind alley, Ave find a wall of concentrated wealth, 
privilege and monopoly practices, flanked by a va.st array of entrenched, 
established institutions and organizations which depend, for their force 
and effectiveness, upon a folklore and ideology which grew up in, and 
out of, another day — the day of scarcity. Huddled in this alley, grop- 
ing for a way out, we find elder citizens stripped of their savings and 
frantic with fear of poverty and insecurity ; ten million able-bodied 
workers imable to find work in our farms and factories which have 
become so efficient and productive that we find ourselves maintaining 
a fifth to a fourth of our population in enforced idleness; millions of 
boys and girls, fresh from schools where they learned all about democ- 



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racy, and equality, trying to set foot on the bottommost rung of our 
economic ladder; millions of small business men and women trying to 
hold onto their comfortable middle-class thoughts about competition 
being the life of trade— in a jungle of chain stores, monopolies and 
fixed prices; and millions of small scale farmers trying to maintain 
American agriculture as a respectable and secure way of life in compe- 
tition with industrialized, mechanized and collectivized farming by 
banks and corporations ; labor unions struggling desperately to win 
for workers their honest and just share of the wealth they create. 

The whole scene is remarkable for its paradoxes and conflicts 
which, by any rational standards, are inexcusable. We have millions 
of people needing medical attention who can not have it, even though 
we have plenty of half-idle doctors and dentists. We have never had 
so many hungry, ill-clad people nor so many bulging warehouses. We 
have never had so many children needing milk nor so many dairy 
farmers struggling to dispose of their milk at fair prices. We have 
never had so many unemployed in the face of so much work needing 
to be done. 

On top of it all we have never had so much unused knowledge, 
skill and wit. Small wonder, then, that we have never had so much 
frustration, mental distress and crime. Small wonder, therefore, that 
our governmental institutions are so strained at the seams. 

If there is anything at all that an economic system must do, it is 
to instrument the well-being of the people — all of them — all of them, 
at least, who are employable and are willing to work. And that is just 
what our present system is not doing. At least it is not doing it suc- 
cessfully. Our economic system is not at all easy to describe but its 
philosophy is i-ather well epitomized as a system of laissez faire — that 
is, "let things be as they are. " It depends upon the automatic prompt- 
ings and controls of capitalistic exploitation in an atmosphere of free 
enterprise ; or such is the argument of its defense, first stated by Adam 
Smith who held that the well-being of all was best served in a society 
where the individual was free to and did pursue his own interest; 
free to do just as he pleased with his land, his capital, his money; 
free to drive the best bargain he could exact. That was 163 years ago. 
Thomas Jefferson's thinking followed the same pattern when, a few 
years later, he observed that "that Government is best which governs 
least. ' ' Laissez faire — let men do as they please. 

But the trouble is that the automatic workings of our system are 
no longer automatic. Wealth is so concentrated, monopolies are so 
entrenched, that competition is stifled and initiative discouraged. Our 
antitrust laws have failed to prevent the evolutionary development of 
monopolies. Attempts to break them up and enforce competition 
between their component parts have, for the most part, proved futile 
and ineffective in results, even when successful as to form. 

And so we vdtness still another paradox; rational people demand- 
ing that government "do something" about this, that or the other 
thing, the while they demand that government keep its nose out of 
business; otherwise rational men demanding that the budget be bal- 
anced, the while they also demand that government stick its nose into 
business to the extent of doing something special for them — something 
that will increase the scale of government spending. 



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STATE PAPERS AND PUBLIC ADDRESSES 



It is well to keep this in mind when we hear men talk loosely about 
government in business, government inefficiency, etc. It is well to 
keep in mind that althoufrh our laissez faire economy served us fairly 
well up to about a quarter century ngo, when it drew up into a world 
war, it did so very largely because of government subsidies. Ever 
since the very birth of our Nation, the forces of expansion, develop- 
ment and exploitation have been fostered by doles, subsidies and 
tangible public aid of every sort. Free land for soldiers; free land 
for the settling; mineral wealth for the mere taking; land and cash 
for the railroad builders ; power sites for the asking ; patent rights for 
inventors ; protective tariffs for our manufacturers. 

And now, in more recent years, we have held our railroads and 
utilities free from the ruinous competitive practices of the open market. 
We pay heaAy subsidies to encourage aeronautics; to encourage the 
search for scarce minerals and metals; to maintain the building and 
construction industries as going concerns; and to assist private bank- 
ing by guaranteeing their deposits and loans. To these we have added 
a vast miscellany of government interventional measures; fair trade 
laws, social security laws, labor and safety standards, collective bar- 
gaining; all designed to save business from its own irrational and 
destructive behavior. 

These measures, when adopted, were condemned as "Government 
in business." But it is well to point out that ever}"^ one of them came 
into being, not at the instance of politicians and demagogues, but 
because of the powerful and effective insistence of first one and then 
another section of our business and social communities. 

Too much government in business may indeed have bad effects, 
but its critics are entitled to be reminded that effects always have 
causes. They are entitled to be reminded that they might more con- 
structively address themselves to causes. When critics do that, they 
become statesmen. 

Now to sum matters up at this point: 

First: Our economic system is not delivering the goods. 

Second : This failure subjects all of our institutions, social, eco- 
nomic, religious and political, to the most severe strains and tests. 

Third : The price of enduring government is that of making our 
economic system work well and rationally. 

I believe it is now very generally agreed that this is a proper 
objective of government : to make our economic system work. 

And here in America, as I view matters, no means to this end are 
either workable or justified ; no means to this end will meet the appro- 
bation of the people except peaceful means, the full retention of our 
civil liberties and democratic principles, practices and processes of 
which the American ballot box is the everlasting symbol. 

This brings me to the point of mentioning some of the problems 
which are pressing hardest for solution. It is with no thought of 
excluding any important problem that I list the following which hold 
special interest for farmers: 



1. Unemployment 

2. Pensions 

3. Labor 



4. Revenue 

5. Public Ownership 

6. Agriculture 



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211 



Unemployment 

The primary effect, the primary problem growing out of the failure 
of our economic system to deliver the jroods, is that of unemployment. 
It is my own sincere conviction that if we can induce the reemploy- 
ment of the unemployed, we shall, almost automatically, eliminate or 
greatly mitig'ate a long- list of contingent, dependent problems, among 
them high taxes, bankrupt governments, men too old at 40 to get work, 
employment for youth, the depressing effect of unemployment upon 
wages and organized labor's attempts to maintain wage scales, work- 
ing conditions and collective bargaining, and a decent return for work- 
ing farmers. 

The State of California spent over forty million for unemployment 
relief last fiscal year. This is a terrifying figure and, if we did not 
have this burden, Ave could balance our budget and retire our floating 
debt without enlarging our tax base. But, even so, our relief is scaled 
to the barest subsistence and there are thousands of families needing 
relief whose bread winners can not quite qualify under present laws, 
rules and regulations. 

We have been wrestling with this condition for some years. We 
have reached the conclusions that we must help the involuntarily unem- 
ployed; that the dole and other relief methods of the past and present 
are not only too costly but ineffective and impractical ; that more 
practical and at the same time far less costly methods must be devolved 
and put into operation. 

We have only lately completed exhaustive studies, undertaken not 
from the viewpoint of relieving the worst effects of unemployment, 
but from that of reemploying the unemployed. And we have deter- 
mined upon a definite program to that end. 

It is outlined in what has become known as "The Richards 
Report," by the Governor's Committee on Reemployment which I 
appointed early this year. This report has received country-wide 
acclaim from experts and leaders in all walks of life. Your own deep 
and inescapable interest in the subject of unemployment is well proved 
by the fact that your officers requested and we supplied your organ- 
ization with 350 copies of the report, so that you might have the oppor- 
tunity to analyze its recommendations. 

I shall not go into the details of the report beyond asserting my 
conviction that it points the way to balanced budgets, to adequate relief, 
to reemployment, and, above all, to the rehabilitation and restoration 
of the morale of scores of thousands of workmen and their families who 
have, for years, suffered worries, frustrations and discouragements that 
have made relief seem to them well nigh hopeless. We do not offer 
this plan as any Utopia. It rests wholly upon the principle that men 
must work and produce in order to live and they must be given the 
opportunity to do so. Our plan is to put unemployed men and women 
in practical working contact with land and productive equipment. 

Old Age Pensions 

One of the most spectacular phenomena produced in the ten 
depressed years now just closed is the organized demand for old age 
pensions. California has just been a principal battleground of a 
pension movement. Since it is all so recent, and since my own views 



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were rather well published, I shall not here attempt a broad statement. 
It must be realized that the conditions producing the demand, and the 
demand itself for adequate Old A<re Pensions, are very real indeed 
and can not be disreprarded. Obviously, only a national pension plan, 
federally financed and operated, would make for uniformity and 
equality of citizens of all states in the distribution of Old Age Pen- 
sions. But until an adequate federal plan has been adopted, the 
individual states, in all fairness, can do no less than render the most 
generous old age assistance their finances will permit. 

Labor 

Because agriculture is part of our general economy, it is affected, 
one way or another, by the conditions faced by other groups. It has 
been said that half of the farm problem is on the farm ; the other half 
is in the city. Particularly is this true for California agriculture. 
Your welfare is measured directly in terms of consumer purchasing 
power. How important this consumer purchasing power is, particu- 
larly for California's specialty crops, may be easily visualized in the 
authoritative statement recently made by the president of the Federal 
Surplus Commodities Corporation who described lack of demand in 
these graphic Avords: 

"There are 40,000,000 Americans living in families whose average 
cash income is only $f) a week. Imagine what a job it would be for 
any of us in this room to pay house rent, to feed and clothe our 
families, and try to educate our children on less than $40 a month. 
About one-half of these 40,000,000 persons are getting some sort of 
public assistance. Studies indicate that they spend an average of 
about $1.00 a week per person for food. That's fifteen cents a day — 
five cents a meal. No wonder farmers are having trouble finding a 
broad enough market for what they produce. No wonder malnutri- 
tion is a headache for the Public Health Service. No wonder it has 
been a tough job for business men to make a decent living when a third 
of their customers have dojie more window-shopping than cash buying. 

"In other civilizations, men have suffered from famine, disease 
and local despots, but this is the first time in Avritten history when men 
have suffered because they were surrounded by too much of the things 
they needed most. If it were not so tragic, we could laugh about it. 
Fifty years from now, men will." 

Labor is your best customer. A substantial purchasing power 
for the man who carries the dinner pail and wears the overalls means 
the largest return and the best possible security for the man who fills 
the milk pail and the bread basket. 

I should like to tell you just a little bit of where I believe the 
organized labor movement fits into the American scene. 

Not the least effect of ten profitless years and the sharpening of 
the economic problem has been the new and stronger and more com- 
manding status of Labor ; more especially organized Labor. The rise 
of industrial unionism is most significant, being a natural response of 
labor organization to giant industrial units with their labor-saving 
machinery, standardized, repetitive operations and mass production ; 
and the other far-reaching changes that have been going on in industry 
itself. 



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213 



But, to me, the rise of Labor has a larger significance. "We find 
its historical counterpart in the rise of the middle-class in the Seven- 
teenth and Eighteenth centuries with the advent of capitalism and the 
institution of private property. Tlieir rise was a long struggle for 
respectabilit}^ in a world where tlie pursuit of business, commerce, 
manufacturing and trade were beneath the dignity of the "best people." 

Labor's rise is likewise a struggle for respectability in a world 
largely dominated not by farmers but by business men and middle- 
class citizens. As I view it, we can not serve society by denying labor 's 
claims. We can serve society extremely well by supporting legislation 
recognizing these claims. These include such measures as the National 
Labor Relations Act, mediation and arbitration laws, job insurance, 
old age security, collective bargaining, minimum wage laws. 

Revenue 

One of the most difficult of the farmer's problems is that of taxa- 
tion. The problem is not merely that the aggregate of taxes is a heavy 
burden. In fact, it is more especially a problem of how these taxes 
are levied — upon whom — upon what — and in what proportions. 

My contention is that our present taxes are levied in a manner 
that imposes a grossly unfair and uneconomic share of the total tax 
burden upon home owners and upon small-scale farmers, farmers who 
are trying to make agriculture and rural living their "way of life." 

Our tax structure resembles, not a well planned house in which 
each part is rationally related to every other part, but rather it 
resembles the famous Winchester House at San Jose, which grew and 
grew, room by room, without plan, rhj-me or reason, until it now pre- 
sents an absolutely bewildering array of rooms and additions ; all con- 
nected in some way, but having no relation each with the other. 

It is high time that we examine our tax structure with a view to 
making it fit, not the economic conditions of a generation ago, but 
today's conditions. 

I can not here go into a long discussion of tax theories but there 
are just a few points to which I wish to draw your special attention 
in your capacity as farmers. 

Not all taxes are bad. In fact, some taxes have a definitely bene- 
ficial social effect. 

If a tax chokes consumption; if it discourages farming; if it dis- 
courages home ownership and family life — then, such a tax is regres- 
sive and definitely contributes to continued depression. Sales taxes 
and excessive taxes on improved real estate and personal property are 
of this kind. 

But if a tax be scaled, not so much according to what a man may 
have, but according to his ability to pay, then such a tax definitely 
contributes to recovery, because it tends to equalize the appalling 
inequality of income which lies at the very roots of our economic 
difficulties. 

Income and inheritance taxes are of this kind. 

Of all government revenues, Federal, State and local, the country 
over, 27 per cent derive from property taxes, 24 per cent derive from 
consumption taxes and only 21 per cent derive from ability-to-pay 
taxes. 



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STATE PAPERS AND PUBLIC ADDRESSES 



Twenty-seven per cent is much too high a proportion to collect 
from property taxes. It bears down very hard on farmers, especially 
small scale farmers. So does the 24 per cent of consumption taxes. 

Large industrialized farms are better able to bear this heavy 
burden because their unit production costs are less and also because 
they are so often owned or controlled by interests which also own or 
control packing and marketing facilities. These interests are thus in a 
much better position to obtain profitable prices for their farm produce 
than the small farmer. Thus, in urging lower real estate and con- 
sumption taxes, I do so because of the special need of the small-scale 
farmer. 

I believe real estate and consumption taxes should be reduced by 
at least one-third, and that the loss of revenue should be made up by 
increased income and inheritance taxes. 

In other words, if we would adjust our tax system — Federal, State 
and local — so as to collect about 18 per cent from property taxes, 16 
per cent from consumption taxes and 45 per cent to 50 per cent from 
ability to pay ; if we would do this, the American farmer, including 
the working farmer of California, would have a reasonable chance to 
change from denims to woolens, a chance to climb into a new car and 
rejoin the American middle class. 

Such an adjustment of our tax system would undoubtedly work a 
most remarkable and sahitary improvement throughout our entire 
economy. 

Ever since the World War, England has been collecting some 58 
to 60 per cent of all her taxes according to ability to pay; that is, 
through income and inheritance taxes. In spite of the fact that Eng- 
land was much harder hit by war, much harder hit by depression, 
carrying a higher proportionate load of unemployment dole, and col- 
lecting much higher per capita taxes than the United States; in spite 
of all this, England has done a much better job of budget balancing, 
and enjoyed a more equable economy than we in America. 

It will not be easy to effect the tax revision I here suggest. We 
shall have to overcome the "tax habits" of both the Federal Govern- 
ment and those of the several states. We shall be most bitterly opposed 
by men and women of great wealth and income, and by most, if not 
all, of the large vested interests. They always have fought adequate 
income tax laws because such laws would compel them to pay their 
full fair share of the costs of government. 

It is, and it shall continue to be my policy throughout my admin- 
istration to urge the changes in our local. State and Federal tax laws 
that will adjust our tax system along the lines I have discussed. 

Every consideration of self interest, to say nothing of equity and 
justice, should prompt the California farmer, especially the small-scale 
farmer, to endorse and support my tax program. 

Public Ownership 

One of the most effective methods for improving the farmer's 
condition is to help him to obtain lower utility rates. Some sixty-five 
years ago, Jenny Lind and electric lights were P. T. Barnum's main 
circus attractions. The development and supply of electric power since 
that time have been one of man's major advances. In recent years, 



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215 



most spectacular water conservation and power developments have been 
undertaken in our western states. Most notable of these are the Grand 
Coulee, the Bonneville, the Boulder Dam and the Central Valley Proj- 
ects. Because of their great cost they were possible only by and 
because of the help and cooperation of a liberal and far-seeing Federal 
Government. 

It is now up to the several states and local communities to prepare 
to use the power from these projects. In the west we do not have all 
of the materials and facilities for the making and forging of steel. 
In this, the eastern states enjoy some advantage over us. We can and 
we shall overcome this advantage by utilizing to the fullest the enor- 
mous power resources now placed at our disposal by the Federal 
Government. 

I am one of a great and growing body of citizens who are con- 
vinced that we can take this fullest advantage of giant power, of the 
mo.st modern techniques by eliminating high interest rates and private 
profits ; a combination that is possible only under public ownership. 

Tacoma, with the lowest municipal electric rates in the United 
States, and Seattle are outstanding examples of the possibilities and 
benefits of public ownership. 

Los Angeles enjoys municipally owned and distributed water and 
power at the lowest rates for any city of like size. And at these rates 
the Water and Power Bureau is paying off the cost of acquiring and 
building her plant and making substantial contributions to public 
charity and to the reduction of taxes. All of this at no cost to the 
taxpayer except in his capacity as a utility rate payer. 

Cheap water and cheap power; these account for Los Angeles' 
extraordinary growth as a great manufacturing and industrial center. 

The Central Valley Project, now under construction, will add 
enormously to the power resources of northern and central California. 
We have plans to facilitate the distribution of this power, not only to 
industry, but also to the farmers of the Sacramento and San Joaquin 
Valleys, at much less than present rates. Cheap power means cheap 
water. Cheap water spells prosperity for the farmers where light 
rainfall and lowered water tables have forced a reversion of hundreds 
of thousands of acres of fertile lands to desert. 

All this can be accomplished only through a broadly applied, well 
integrated system of public ownership. That is our plan. 

Agriculture 

A most spectacular example of the effect of economic changes dur- 
ing the past quarter century is seen in the lower level to which the 
American small farmer has fallen on the economic scale. With other 
countries having become more self-sufficient agriculturally, his foreign 
markets have been wiped out or greatly reduced. With tariff protected 
goods that he must buy and unprotected markets in which he must 
sell, he, his family and his laborers, have been the natural prey of 
the favored elements of our society. With mortgage and tax fore- 
closures, farm lands tend to settle more and more in the hands of 
corporations, banks, insurance companies and speculators. As if this 
absentee-ownership were not bad enough for the community, the newer, 
more financially able owners have introduced industrial, labor-saving 



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STATE PAPERS AND PUBLIC ADDRESSES 



methods and collective farminp:, financed at low interest rates. Against 
such combinations, the small farmer, whether he be owner or tenant, 
has but little chance of survival. About 58 per cent of the productive 
farm lands of California consist of commercialized farms. 

Federal crop control payments were severely criticized as uneco- 
nomic and un-American. But they were no worse — and no better — 
than the "crop control" exercised by industry. Surely it is no worse 
to not raise cotton, corn or wheat for which there is no adequate market, 
than to not produce automobiles for which tliere is no adequate market. 
But good or bad, crop control payments were thrown out by the 
Supreme Court. As an alternative way to help the farmer, the Federal 
Government now pays him to prevent soil erosion, to build up his soil 
fertility, etc. A generation ago this would have seemed the purest 
folly. Even todaj-, it seems a round-about way to give practical help 
to the farmer. Looking at it squarely, it is a government subsidy. 
But government subsidies are a habit with us. It is surely just as 
proper and effective to subsidize farmers as bankers, industry and the 
merchant marine. I believe it is more so. 

But even so, we have not gone far enough. 

Here in California, we are working on still other fronts for the 
small farmer. We have prorate laws for crop marketing — but their 
administration was monopolized by the big farm corporations, with 
definite injury to the small farmers. We are by way of changing this 
condition. 

We also propose to make mortgage loans available to the dirt 
farmer at low interest rates ; rates which will comport with the essen- 
tial permanency of his securitj^ and the fact that the dirt farmer and 
his family are basic elements of our society. 

We also propose to make crop loans available to small farmers at 
low interest rates. These loans will leave him free to sow, cultivate 
and harvest, to market his crops to best advantage to himself; free 
from domination hy the processors, and free from the brokers and other 
middlemen who stand on the side lines, waiting to exact their tolls for 
crop loan contracts which not only tell him how he shall conduct his 
business and how much he may pay his farm laborers, but strip him 
of all chance of realizing a profit for his year's labor. 

We propose to expand the application of our agricultural market- 
ing laws — to the end of reducing the wide margin between the prices the 
farmer receives and those the consumer pays. We propose in our reem- 
ployment program to provide for the exchange of surplus commodities 
produced by the unemployed for products of our farms for which no 
cash market is available. 

The plight of the American dirt farmer, especially in the West, 
is bad. Of all the urgent problems pressing for solution, none is more 
serious, none is more urgent, none is more complicated than that of 
agriculture. We can not solve our other problems unless we solve this 
one. We can not shirk or disregard it except at grave peril to society. 

There are many other governmental problems in which farmers 
have a legitimate and active interest. These include the problems of 
tax-delinquent lands, land use, grazing, reforestation, water supply and 
seasonal farm labor. I shall not go into these matters beyond their 
mere mention because of time limitations. But I believe I have said 



PUBLIC ADDRESSES AND RADIO TALKS— 1 939 



217 



enough to fully indicate the general attitude of my administration 
toward them. 

I firmly believe that our policies, in their relation to working 
farmers, are progressive and constructive. I appointed Mr. W. B. 
Parker, one of your own active members and a past president of your 
largest county unit, as Director of Agriculture. I appointed him 
because he was fully acquainted with California agriculture and its 
problems ; because he was intimately acquainted with the Federal farm 
program ; because he held progressive views of the farm problem, views 
in which I concurred ; and because he concurred in many of my views 
on other subjects related to agriculture, such as the subject of public 
ownership of electric utilities. 

Naturally, I want, and I solicit your cooperation and support. 
In fact, I believe I do enjoy the sympathy, the confidence and the 
support of the great majority of the rank and file of California's 
farmers. 

You can easily guess, therefore, that it has been a matter of deep- 
est concern and disappointment to me, on many occasions, to discover 
your leaders opposing my program in many of its parts — very import- 
ant parts, incidentally, of the greatest significance to working farmers. 

I am frank to say that I have been puzzled to find any group of 
working farmers opposing our Central Valley Project plans. They 
will not only hasten the realization of its fullest benefits. They will 
bring cheap water and cheap electric power to the farmers of the 
Sacramento and the San Joaquin. 

I was puzzled to find farm bureau leaders opposing our relief 
program which is designed to take the unemployed off the dole and 
lift them off the backs of the taxpayers. Today, in Los Angeles County, 
60 per cent of the county tax revenues are spent for relief in its many 
forms. Today, if we only could drop all iinemployment relief, our 
State Government would be on a pay-as-you-go basis. We could pay 
off the State deficits without enlarging our tax basis. 

All about you, you see the evidences of how heavily the relief 
burden bears down on California's dirt farmer. In fact, thousands 
of them have been themselves forced on relief. 

I have been puzzled by the opposition by your leaders to our tax 
revision program. It is perfectly true that it would have meant a. 
larger aggregate of State taxes and that some few farm owners would 
have had to pay heavier taxes; net income taxes. But for the most 
part, these few farm owners are not farmers but large corporations, 
banks and insurance companies who find themselves possessed of a 
very high percentage of California's best farm lands. I can readily 
understand that their tax policies would be dictated, not by their land 
holdings and agricultural operations, but by their other interests. I 
can understand why they are perfectly willing to pay high taxes on 
their farm lands so long as they can escape paying income taxes on 
their net profits. I can understand why they, therefore, pose as dirt 
farmers and try to dominate farm organizations, but I take the posi- 
tion that their views on taxation and on a lot of other matters affecting 
small farmers, are in direct conflict with and actually subversive of 
the interests of small-scale farmers. 



15—18527 



218 



STATE PAPERS AND PUBLIC ADDRESSES 



I want to see California agriculture remain a way of life — if you 
please — where the people who own the farms shall work them and 
live on them. 

A study of your own official statements and literature persuades 
me that you are liberal and progressive. For example, the following 
statement is quoted from one of your publications : I quote, 

"The chief objective and immediate responsibility of Farm Bureau 
is to restore and maintain for American farmers their rightful position 
in the economic life of the nation." 

This is indeed a challenging statement. It is impressive. It 
points out directly that social justice and economic equality have been 
lo.st to agriculture, and must be regained. It infers that farmers have 
been exploited. It admits that other economic groups have taken undue 
advantage of those who live upon and work the land and produce 
society's basic economic essentials. It means that farmers and their 
families are not enjoying their ju.st share of the national wealth and 
national income which thej' themselves create. 

These are important and significant facts. In fact, they prac- 
tically define the so-called farm problem. They imply that changes 
are needed ; that all is not well with our present economic sj'^stem ; that 
improvements, amendments, betterments have to be brought about. 

We solicit your .support because we recognize these facts and these 
needs and we propose measures required to translate them into action. 

I turn to one of your printed membership appeals. There I find 
a series of questions which you, as members of the California Farm 
Bureau Federation, are asked to submit to neighbors who have not as 
yet joined your organization. I quote the.se questions verbatim : 

"Are you satisfied with your income? 

"Are you content with farm conditions as they are? 

"Are you convinced that your taxes are fair and equitable; or 
are they too high? 

"Are you content with the interest rates you pay; are you sure 
they will remain at satisfactory figures? 

"Are you satisfied that you are getting the lowest possible power 
and transportation rates; if so, are you assured they will not be 
increased ? 

"Are you satisfied with the cost of medical care and hospitaliza- 
tion ? 

"Is your family adequately cared for? 

"Do you think farmers should have a voice in determining agri- 
cultural policies and administering agricultural programs in the State 
and Nation? 

"Are you satisfied to let other groups and industries dominate 
national policies often to your disadvantage ? 

"Are you satisfied that you, as an individual, can overcome the 
problems that confront you today? 

"And lastlj^ do you think the farmer should lose aU control of 
his product, so far as its selling price is concerned, the moment it leaves 
his premises?" 

These membership-appeal questions are followed by the statement 
that the "Farm Bureau is constantly attacking these and other prob- 
lems," and that "if you are not satisfied with the conditions which 



PUBLIC ADDRESSES AND RADIO TALKS— 1 939 



219 



these questions suggest, you should be a Farm Bureau member and 
help to do something about them." 

I ask your leave to use these very questions in soliciting your 
support of our program. 

I ask you to reexamine our administration's attitudes and our 
program on their own merits. I ask you to criticize them for what 
effect — good or bad — they will have on working farmers. 

You have been extremely patient and attentive — for which I am 
most grateful. 

I have tried to talk not only about the farm problem itself, but 
about many other sub.jects. I did so in the hope of conveying to you 
my belief the farm problem can no more be solved by itself and without 
reference to the problems of labor, industry and other groups, than can 
the problems of these other groups be solved by themselves and with- 
out reference to the problems of farmers. 

I believe that the forces which do and will bring us all together 
are far stronger than those which tend to draw us apart. 

Let me once more tell you how very grateful I am for this oppor- 
tunity to address you. 

I thank you. 



220 



STATE PAPERS AND PUBLIC ADDRESSES 



STATE CHAMBER OF COMMERCE 

Address before the 14th annual State-wide meeting, Palace Hotel, 
San Francisco, Dccetnber 1, 19)9 

President McFadden, Members of the California State Chamber 

of Commerce 
Ladies and Gentlemen 

I have had occasion to criticize rjither severely some of the activities 
of this organization which I believe inimical to the general welfare and 
to the welfare of the members of this organization. I williiiglj' accepted 
your invitation to meet with you because, as Governor, I believe it is 
my duty to do so and engage in an exchange of views which is always 
conducive to a better understanding and sometimes leads to real coop- 
eration and I am frank to say I would like your cooperation instead of 
your opposition in the performance of my duties as Governor. 

It is necessary for the State's chief executive to evaluate properly 
every viewpoint on every major problem, to consider seriously all of the 
solutions which are suggested, and to recommend remedies that are 
fair and equitable, and in the general interest. To do otherwise, would 
be to act discriminately, and in a biased and prejudiced manner. This 
would not meet with your favor nor with the approval of other intelli- 
gent groups. Under a democracy, all citizens and all groups must enjoy 
the same privileges and the same opportunities. That is the least that 
government can do for its people. The guarantee of these rights, 
privileges and opportunities to all groups and to all individuals is 
government's most sacred obligation. Governmental disintegration 
always begins with special privilege. So does economic disintegration. 

I congratulate you on the character of your program. Its agenda 
is most impressive. In fact, it is practically all-inclusive. Its topics 
cover the all-important problems which California faces. These prob- 
lems and our responsibility to find the way to their solution are con- 
stantly on my mind. They absorb my energies. Each day brings me 
concrete references to these problems in one form or another, accom- 
panied by requests for their solution. 

If you and I were to discuss the problems of the day with every 
person in California, T believe the answers we would receive would be 
almost identical. All would revolve around the so-called economic prob- 
lem. To some, this problem means the opportunity of making profits. 
To others, it means the protection of investments, savings, and holdings. 
To many, it means the desire to engage in business. To a great many, 
it means the need for a more adequate return for services rendered and 
to a great many more, the problem is one of finding jobs which do not 
exist. To all, it means the hope of a decent living, of some .sort of 
economic security, of an opportunitj"^ to enjoy the standards of a 
modern civilization. 

There is no quarrel, therefore, with the basic character of the 
problem itself. Everybody agrees that the problem is here ; that it has 
been here for a long time; and that it has been growing steadily more 



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221 



complicated. The only differences of opinion, concerning this problem, 
are those which involve its solution. Apparently, there are as many dia- 
metrically contradictory solutions as there are economic groups. This 
condition naturally leads to an economic impasse and prevents progress. 
Under this condition, a democratic commonwealth becomes a boiling 
caldron of conflicting groups, each refusing to recognize the rights of 
others, and each striving to obtain for itself special privileges and 
special rights that are not in the public interest or for general welfare. 

According to the actions of all economic groups, the relation of 
government to its people is not a controversial subject, although indi- 
vidual groups seem to regard it as controversial. Modern democratic 
government has truly become a gOA'ernment of high pressure groups, 
each of which insists upon the passage and the enactment of legislation 
which would serve the special rights and special privileges of those 
groups. If we are to be consistent, fair and just,_the least we can do 
is not to accord the rights and privileges to some groups that we would 
deny to others. You. as business and industrial leaders of California, 
would subscribe to this platform, and so would all other economic 
groups within the State. 

I submit the premise that there can be no prosperity at the top 
unless there is prosperity at the bottom. All prosperity is interrelated. 
Its diffusion is only a matter of adequate distribution. I champion 
the cause of the underprivileged, not only because they need help, but 
because the improvement of their economic conditions reflects in 
comparable improvements of the economic conditions for all other 
groups. This fact is so obvious that I fail to understand why auy 
program, that Avould serve to elevate the living standards of the less 
fortunate, should be opposed. 

I assume there is not one business leader or industrialist in this 
room who has not heard of Edward A. Filene. Mr. Filene was one of 
the Nation's outstanding merchant princes. TTis enterprises made him 
millions. TTis name, in the business world, is synonymous with those 
of Marshall Field and John Wanamaker. Mr. Filene once told me 
he did not consider that millions he accumulated from other peoples' 
earnings really belon!red to him and he used many of his millions on 
projects that would improA^e our economic and social structures. 

In 1934, Edward A. Filene delivered an address at the TTniversity 
of California, entitled "Morals in Business." What he had to say at 
that time is so compelling, and holds so true today, that I want to 
repeat one of his epigrammatic statements verbatim. 

"There are two ways of becoming good. One is to become inter- 
ested in goodness. The other is to become interested in the facts of 
life. It is not the evil-minded but the absent-minded who constitute 
our Public Enemy No. 1. I have discovered that business can not sell 
more than the people as a whole can buy; and that it is the function 
of business to provide the people Avith buying-power. I have discov- 
ered that high wages, instead of meaning an additional expense to 
business, are necessary to business success, and actually result in lower 
labor costs per unit of product, which is the only sane way to figure 
labor costs. The whole immoral, sinful wastes of production, and 
still wor.se, of distribution, must be eliminated. Business must be 
dedicated to human service." 



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STATE PAPERS AND PUBLIC ADDRESSES 



I would like to convince you that not only must business be dedi- 
cated to human service but jrovernmcnt must be consecrated to the 
needs of its people. The government is merely its people — all of its 
people. It is physically impossible to draw a line of demarcation 
between provernment and people. As a matter of fact, the more compli- 
cated society becomes ; the higher the standards of livin^r ; the keener 
the competition, between individuals and <rroups; and the more bitter 
the strusr^le for existence aprainst forces and conditions, which them- 
selves are a result of cruel profrrcss, the prreater the need for reliance 
upon jjovernment to work out the rules of the frame of life and living 
which the individual and his proup can not do. 

No business man in California, or in the United States, can 
possibly approve the economic paradox in which we are all involved. 
On the one hand, we have unlimited resources, unlimited production, 
unlimited soods and services. On the other hand, we have human 
misery and privati(m such as a comparable civilization never experi- 
enced. A limitless amount of work to be done; and millions of 
unemployed. A tremendous surplus of food to be consumed; and no 
purchasine power with which to buy it. Professional service available 
to those who need it ; and those who require it unable to pay for it. 
Wliat a price to exact for the industrialization Ave have built! 

That there must be some solution for our present economic 
dilemma, is undebatable. I would like to persuade you that that 
solution lies alonjr the avenue of cooperation, conciliation, and of 
grivinfr as well as taking:. There is no other way out. It is not a 
question of more grovernment or less government ; of more taxation or 
less taxation ; of more governmental services or less frovernmental 
services. It is a question of creating a balanced economy, irrespective 
of the cost, so that general welfare may be guaranteed ; special rights 
and special privileges eliminated ; equality of opportunity restored ; 
and tho.se emoluments and standards, demanded by a civilization 
growing more complicated each day, may be increased. 

In this broad, philosophical, yet practical attack upon the problem 
of the day, I seek your cooperation and suggestions as I do the 
cooperation and suggestions of all other groups in California. My 
own approach to our economic problem is not that of mere partisan- 
ship or political expediency. It is to recognize the conditions and 
causes of the problem and proceed with its solution safely, soundly, 
practically and as progressively as possible. If I could persuade you 
to adopt the same nonpolitical approach I would feel that I had made 
an outstanding contribution. If, in addition, I could induce you to 
study this problem, not only from your viewpoint, but from the view- 
point of others whose welfare is the base upon which your welfare is 
pyramided, I would feel that I had made a still greater contribution. 

All conditions result from specific causes. Most of the economic 
clashes, so disturbing to everybody, are due primarily to some element 
of unfairness. Remove this factor, and peace and tranquility are 
substituted immediately for strife and combat. Conscience is stricter 
than any rule or regulation. The keystone in cooperation is conscience. 

I know that it is possible for a cooperative California to work out 
the economic reconstruction of our great commonwealth. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 939 



223 



I know that it is necessary to do so, necessary for your group and 
for all other groups. That the development of a sane and intelligent 
economic program, in which all factors would be dovetailed, and out 
of which benefits will flow equally and proportionate]}' to all groups 
and to all individuals, will pay real dividends to the State of California 
and its people, is a foregone conclusion. I earnestly and sincerely ask 
the cooperation of all of the people of this State in aiding our admin- 
istration, your administration, in formulating and executing such a 
program. 

Purposely, I have not discussed any details of what should be 
done, because your own program, yesterday and today, provided the 
opportunity for this type of a discussion. I hope your final resolution 
will incorporate the broad objectives which I have briefly mentioned 
and the need for which I feel so keenly. I appeal to you, as business 
and industrial leaders of California, to do your part in cooperating 
with other groups in the building of a greater and better California. 



224 



STATE PAPERS AND PUBLIC ADDRESSES 



PUBLIC HOUSING 

Address at banquet of Western Public Homing Officials, Fairmont 
Hotel, San Francisco, December 20, 1939 

Mr. Straus, Miss Griffith, Mr. Chairman, Distinguished Guests, 

Delegates and Officials, Friends of Public Housing 
My Fellow Citizens 

No design for American living can excel its various parts. 

The success of any plan for America's future can be no better 
than the people who execute it. This is true, no matter how sound 
the principles upon which we base our plan; no matter how carefully 
we work out its details. 

Which is merely another way of redeclaring that tomorrow's 
America depends upon, and will be no better and no worse than today's 
children. This is recognized, not only by Americans for America, but 
throughout the civilized world ; as is so well stated in the League of 
Nations' Declaration of Child Rights, adopted in 1924 and again in 
1934. I here quote these declarations: 

"First, the child must be given the means requisite for its normal 
development, both materially and spiritually. 

"Second, the child that is hungry must be fed; the child that is 
sick must be helped ; the child that is backward must be helped ; the 
delinquent child must be reclaimed ; and the orphan and the waif 
must be slieltered and .succored. 

"Third, the child must be the first to receive relief in times of 
distress ; 

"Fourth, the child must be put in a position to earn a livelihood 
and must be protected against every form of exploitation ; 

"Fifth, the child must be brought up in the consciousness that 
its talents must be devoted to the service of its fellowmen. " 

The child's welfare is the natural and proper concern and func- 
tion of the family. Thus, the family is the verj'^ foundation unit of all 
society. The family is indeed in itself a society; limited, it is true, in 
numbers, but a true society, of a man's own household, anterior to 
every state or nation, with corresponding rights and duties. This is 
recognized, not only by religious organizations and in numberless 
statutes, but in the rationalizations with which business institutions 
justify their very existence ; such as banks, building and loan, con- 
struction and insurance companies, all of which most assiduously 
uphold the virtues of family life, and the attendant virtues of home 
ownership. 

Restated in fewer words: America's future depends upon today's 
children. Children have rights. These rights are best served and con- 
served in the family. Family life is closely dependent upon the kind 
of a house in which the family lives. Thus, America's future is closely 
dependent upon our having decent houses in sufficient numbers. 

The fact that you have just concluded a two-day western confer- 
ence of public housing officials, the presence here this evening of so 



PUBLIC ADDRESSES AND RADIO TALKS— I 939 



225 



many citizens from all over the west, is very fair evidence, not to say 
conclusive proof, that we suffer from a tremendous and most acute 
shortage of decent homes for families in the low-income groups; evi- 
dence, not to say proof, that our finance, real estate and building 
industries are not geared to the job of providing such homes at costs 
these families can pay. 

As a matter of fact, the housing shortage is so acute that it 
actually J:hreatens America's future; so acute that it has become one 
of America's number one problems; so acute that Government is now 
doing something about it; and must do a great deal more. 

I can scarcely be called a housing expert. But my interest in the 
problem, and my determination to see it solved are quite equal to that 
of experts, technicians and statisticians, because my interest and my 
determination rest upon the secure foundation of awareness of the 
deep-seated economic and social problems and conflicts harassing our 
state and nation ; an awareness of the close-coupled relationship that 
housing shortage bears to these problems and conflicts. 

After six years of devoted propaganda by housing enthusiasts, 
there surely can be no great need for a detailed description of the 
physical and mental sickness, the crime and the social degeneration 
caused by slums. They have, for a long time, been recognized as 
frightful fire hazards. Even the military experts now tako note of the 
slums in the crowded cities ; recognizing them as liabilities from the 
standpoint of defense. 

The Housing Problem in California 

Unique in many other ways, California is also unique in the special 
nature of her housing problem. And because of this uniqueness, it 
requires, and deserves, a special approach. Generally speaking, the 
housing problem, throughout the Nation, in its most acute forms, is 
a problem of urban or metropolitan housing. And we do indeed have 
that very problem here in California. But our housing problem, in 
its most acute form, is essentially a problem of rural housing. 

That is to say, our worst housing, with the worst overcrowding, 
and bad sanitation, is found in the rural areas. By rural areas, I 
mean, generally, all areas outside of San Francisco, Oakland, Los 
Angeles and San Diego, and more especially the northern and central 
valleys and the Imperial Valley. In other words, the worst slums in 
California are the rural slums. The factors which have brought about 
this situation are numerous and complex, and have developed over a 
long period of time. 

Migratory Labor in Relation to Rural Housing 

A. For a great many years, most of the seasonal agricultural work- 
ers in California, numbering from 175,000 to 200,000 people, were 
aliens who left the rural valleys at the conclusion of the seasons. Today, 
as a result of the Dust Bowl influx, and many other causes, a very 
large percentage of these workers are Americans who are trying to 
settle down. Thousands of them have taken root and become residents. 
The increase in population in the rural counties, unaccompanied, as it 
has been, by any housing boom, would of itself create a serious housing 
shortage. It is estimated that the population of Tulare County has 



226 



STATE PAPERS AND PUBLIC ADDRESSES 



increased 30 per cent in eight years. In other counties, the population 
has doubled, as in Madera. 

Numerous surveys show clearly that, as an accompaniment to this 
development, more and more agricultural workers reside in the rural 
towns rather than in the labor camps. In San Joaquin County in 1920 
the rural and urban populations were approximately equal. But by 
1938, we find 70 per cent of the people living in the incorporated cities ; 
with only 30 per cent in the nonurban areas. More and more agricul- 
tural workers are settling down and becoming permanent residents of 
the rural counties. 

In other words, the rapid growth of population in the rural coun- 
ties, in and of itself, would have created a serious housing problem. 
But this problem has been intensified and aggravated by the extremely 
low earnings of farm workers ; and, of course, so many of the newcomers 
are farm workers, having come from the dust bowl. 

These people have been housed in labor camps, shack towns, and 
auto camps. 

Labor Camps 

Many of these immigrants, on first arriving, moved into private 
labor camps maintained by farm owners on their premises. Last year 
there were some 4,500 farm labor camps with a population of about 
145,000. As the name implies, these camps are designed merely for 
temporary, seasonal occupation, and are wholly inadequate for perma- 
nent housing. Most of them consist of one-room frame cabins, with only 
the most prin^itive facilities. Many workers have been stranded in 
these camps after the seasonal work was over. Last year the cotton 
camps were 60 per cent to 70 per cent occupied throughout the winter. 
The overcrowding was simply appalling, with as many as eight persons 
living in a one-room cabin. In ]\radera County the average was 4.5. 

Shack Towns 

Many of these workers, not permitted to remain in the labor 
camps after the season, have moved into shack towns adjacent to the 
valley cities and towns. These shack to-wTis present a most distressing 
problem because they are located, for the most part, in areas not subject 
to adequate public regulations. They are mushroom communities; 
flimsy, unplanned, unregulated and uncontrolled. For the most part 
they are devoid of sanitary facilities. They are located on riverbanks, 
ditch banks, and other unlikely spots. The housing is primitive, con- 
sisting of shacks, tents, lean-tos, and dugouts, shockingly overcrowded. 

There are thirty or more major shack towns between Sacramento 
and El Centro. Perhaps thirty to forty thousand people are living in 
them right now. 

Auto and Trailer Camps 

Some of these newcomers have moved into the cheaper auto and 
trailer camps. Intended merely for overnight or transient occupancy, 
these camps are wholly inadequate as permanent housing. 

Necessity for State Action 

Because of the peculiar origins and nature of California's rural 
housing problem, the only practical approach possible is from the 



PUBLIC ADDRESSES AND RADIO TALKS— 1 939 



227 



point of view of the state as a whole. The present program of the 
United States Housing Authority is predicated upon decentralization, 
with initiative and responsibility assumed primarily by cities and 
counties. For housing in the large metropolitan centers, this program 
serves very well, and we already have several rather active local housing 
authorities operating under this program. But where rural housing is 
the major element, we find that it is the State, rather than the counties 
or to^vns, that must assume initiative and responsibility. This is true 
for a number of definite reasons which I shall here describe at some 
length because they bear so directly upon our problem. 

a. In the first place, the rural counties of California have shown 
no indication that they realize the seriousness of the problem or that 
they accept the responsibility for doing anything about it. One county 
authority resigned shortly after its appointment, indicating thereby 
that it saw no necessity for a housing program. A certain city in our 
far south appointed an authority. Shortly afterward this authority 
reported back that it saw no necessity for public housing; and this 
despite a comprehensive housing survey, previously made, which dis- 
closed a grave housing shortage in that community. 

In the face of a growing shortage, which has been acute since 1935, 
no functioning authority has been established thus far in any of the 
rural counties. This demonstrates the necessity for State intervention. 

b. In the second place, for purposes of planning, the State is in a 
much better position to view the problem in its broadest aspects; and 
to plan on a much more comprehensive basis than any one county 
could possibly hope to do. The problem of rural housing in California 
is directly related to the distribution of work opportunities in Cali- 
fornia agriculture. The State is in a better position, than any of the 
counties, to analyze this problem and to locate housing projects where 
there are the most work opportunities. 

c. In the third place, for purposes of administrative economy and 
efficiency, a State Housing Authority offers many advantages over a 
number of separate, uncoordinated, independent county authorities. 
Once a project has been constructed, administrative expense becomes 
very important, because it has a direct bearing upon the amount of rent 
to be charged. A single State agency can manage many projects with 
much less overhead cost than if each project be a separate and distinct 
unit under a county authority. Likewise, the State can attack the job 
of construction with mass production methods, and build more cheaply, 
because of the larger scale of operations. Furthermore, a state author- 
ity can achieve uniformity of regulations in the use and occupancy of 
these projects, the rents to be charged, etc. The program, in other 
words, can be .supervised as a whole, and the relation of every project, 
each to the other, can be carefully weighed and considered. 

d. A fourth reason that a rural housing program must be under- 
taken by the State is that the State government, as such, is already 
deeply involved in it. People have the impression that the State is not 
spending money for public housing. As a matter of fact the lielief 
Administrator is spending millions in rent for the most miserable hous- 
ing for relief clients; despite the fact, now well kno^vn, that excellent, 
low rent houses, wholly suitable for rural living can be built, and the 



228 



STATE PAPERS AND PUBLIC ADDRESSES 



cost liquidated in a four to six year period by the money now being 
spent for rent. 

In the eight San Joaquin Valley counties alone, the State is spend- 
ing from one hundred to one hundred twenty thousand dollars a month 
for relief client rentals ; for shacks, hovels, cheap auto camps and tent 
camping space. The fruit of these rent payments is this: rural slums 
have become highly profitable to their owners. Very naturally, they 
show only a negative interest in public housing. They are opposed to 
public housing in the rural areas. The State, therefore, is the real 
party in interest as respects the rural housing. 

e. A fifth reason for State rather than local action is found in 
plans in connection Avith rural housing for a certain amount of coop- 
erative farming, for the production of directly consumable commodi- 
ties such as milk, eggs and vegetables, Avhich will raise the actual living 
standards of these people. 

The benefits of such cooperative farming have been clearly demon- 
strated b}^ the Federal Farm Security Administration. Families living 
in their housing projects were able last year, to sell from half-acre 
garden plots, produce bringing them about $100 per unit. This, of 
course, was in addition to substantial savings in living expenses from 
this same source. When these two elements are considered together 
it becomes apparent that subsistence farming, even on such a restricted 
basis, namely half-acre lots, goes far to supplement cash income earned 
by outside labor. 

f. In the sixth place: we find many legal restrictions and limita- 
tions. For example, the Attorney General has ruled that although the 
State Relief Administration can and must provide shelter for relief 
clients on a rental basis, it has no authority to institute a housing 
program. On the other hand, the counties, unless they set up their 
own housing authorities, can provide housing for only their unemploy- 
able indigents. But it is doubtful whether a county can legally go 
further than this in the direction of public housing except under their 
power to appoint housing authorities. Certain rural counties have 
indicated a willingness to contribute land and some materials for a 
housing program, provided some Relief Administration labor be used. 
A State Housing Authority should be clothed with powers broad 
enough to take advantage of such oflFers. 

Operation of a State Housing AutJiority 

A State Housing Authority would operate essentially in the same 
manner as a city authority. That is, it would qualify for U. S. H. A. 
loans. Aside from administrative expense for the first year of opera- 
tion, and the assumption of a small proportion of the initial cost 
(usually 10 per cent), the State would have no direct obligations. 
The funds would come from the United States Housing Authority. 
The State Authority would not attempt to interfere wtih existing 
housing authorities, but would concern itself primarily with the prob- 
lem of rural housing where the greatest need exists, and where the case 
load is heaviest. Under such a program, rents can be kept as low as 
$7 or $8 per family per month, as proved by projects already built in 
Texas. The construction work itself would stimulate business and 
trade. It would provide decent and adequate housing for thousands 



PUBLIC ADDRESSFS A \l) I'.ADIO TALKS— I 939 



229 



of deserving citizens now living in needless squalor. Rural slums 
could be eliminated. And it -woxild produce an enormous savings in 
rents now being paid for relief clients. 

A sample of the rent savings possible is found in a survey of relief 
client housing in Stockton. Most rent payments were found to range 
from $10 to $20 per month. Under a real public housing program 
these people could be housed far better at approximately $8 per month. 

Our several years of experience with public housing in America 
have raised many questions and issues. A clear-cut opposition has 
been formed, exactly like that always encountered by all progressive 
movements at their inceptions. The opposition, in this case, erects 
fears of an invasion of the field of private initiative ; contends that 
public housing subjects private enterprise to unfair and ruinous 
competition. 

However unselfish and sincere this opposition, it seems to me that 
it is based on mere prediction, rather than accomplished fact. 

Every attempt is being made, every attempt should be made to 
restrict public housing to that narrow field of enterprise where the 
building industrj^ has failed to provide adequate housing and where, 
as a consequence, private owners are exploiting the very misery of the 
underprivileged. It does seem to me, that in this narrow field competi- 
tion is completely justified, and should be deliberate. 

If public housing experience in England may be taken as a guide, 
these dire forebodings can be discounted and quieted. In the past 20 
years, England has built over two million dwellings under a dual 
policy of public and private housing. Par from ruining private enter- 
prise, it actually has stimulated the private real estate business. 

However, in any case, we can not pass final judgment on public 
housing for many years — years yet to come. 

On the other hand, there is a tremendous, highly diversified, and 
rapidly growing sentiment in favor of expanding and strengthening 
the public housing program; in favor of placing it on a permanent 
basis. This sentiment is crystallizing around the United States Hous- 
ing Authority and the United States Housing Act, and the further 
amendments thereto needed for still further expansion and more effec- 
tive action. 

In this connection, I am very gratified with the prospect that the 
new Title 2 amendment — directed at the special problem of rural 
housing and earmarking loan funds for that purpose — will receive the 
favorable action of the House of Representatives at the coming session. 
While rural housing is a most pressing problem here in California, we 
know we are not alone in this respect and that we may therefore expect 
very wide support for the Title 2 amendment. 

When we remember that as recently as 1932, public housing was 
only a dream of progressives; when we look about us and find that 
today it is a fact; then we realize that we have traveled far. I draw 
the deepest satisfaction from the belief that early in the next decade, 
public housing will be recognized as far more than an emergency nec- 
essity. It will be recognized and accepted as a beneficient and per- 
manent fixture in the American scene ; universally held high above the 
contentiousness of partisan issues and partisan politics. 



PUBLIC ADDRESSES AND 
RADIO TALKS 

o 

1940 



CALIFORNIA NEWSPAPER PUBLISHERS 
ASSOCIATION 

Address before S2nd Annual Convention, Hotel Del Coronado, January 19, 1940 



Chairman Kellogg, Members of the California Newspaper 

Publishers Association 
Ladies and Oentlernen 

It is indeed a pleasure for me to be here to witness the presenting 
of awards that have to do with peace instead of war, and where merit 
is measured in terms of broadening and deepening the scope of public 
opinion, rather than trying to fashion it to the hard and fast mould of 
a political creed which permits no opposition to be voiced against it. 

Long ago, while still a working neswpaperman myself, I came to 
realize how difficult it is for an editor or publisher to express an 
opinion on every common cause of the people, for whether he likes it 
or not, his newspaper is a business; and to survive as a business it 
can not afford to antagonize its real or potential advertisers. Social, 
economic and political pressures are constantly brought to bear upon 
the newspaperman. If he yields too much he may become affluent, but 
he has lost his independence of thought and action. If he yields not 
at all his business may very likely fold up beneath him, and he joins 
the army of WPA. 

The history of American journalism, while it reveals many a black 
spot of bigotry, venality and corruption, at the same time also reveals 
some amazing high spots. Every State has had its quota of courageous, 
fearless and incorruptible newspaper editors and publishers whose 
devotion to the public weal transcended all thoughts of personal gain 
or popularity. California, too, has its rogues gallery of the press as 
well as a gallery of journalistic heroes, extending back to James King 
of William, who in the early fifties of the last century, fought against 
the corruption of San Francisco's political life. But in the public 
eye of those earlier years, I fear, the press was none too highly 
regarded for the shooting of editors seems to have been a favorite 
indoor sport at the time. 

We have come a long ways since those early days. New condi- 
tions have brought new problems to be met, new issues to be solved. 
The old days of mental tranquility have been succeeded by emotional 
and intellectual turbulence and uncertainty. People everywhere are 
groping wildly for solutions to the problems of today, and in too many 
cases they want these solutions all wrapped in handy packages. This 
desire isn't as fantastic as it seems, for haven't we all been immersed 
in a sea of radio, press and bill-board advertising telling us how a 
package of pills will cure our headaches or relieve us of fatigue, how 
packaged breakfast foods will give us vim and vitality; while still 
other packaged foods will put on or take off weight, as the ease may be. 
Our every problem of a personal nature, so it seems, can be cured at 
once, by using the proper package. Well, if packaged goods will solve 
our personal problems, why not our economic and social problems 



16—18527 



[ 233 ] 



234 



STATE PAPERS AND PUBLIC ADDRESSES 



reason many of our citizens, and as you well know, the patent medicine 
men of politics and social unrest have found in California, a fertile 
field for their operations. 

Now just where does the newspaperman step into this picture? 
Despite occasional statements by observers to the contrary, I am 
firmly of the opinion that the influence of the press as a factor in 
shaping and moulding public opinion, is greater today than ever before. 
The very complexitj- of the problems besetting the public make them 
want to believe what they read. But they will not believe the publisher 
whose eyes are glued to the patli of the past; who refuses to recognize 
the seriousness of our social ills, and who lumps into one category, as 
"crackpots and fanatics," all who are seeking to find a solution to 
these major problems of the day. I am eqiially convinced that these 
publishers who run along with every movement which gathers force 
and momentum, irrespective of its fundamental economic and social 
validity, will in the long run, lose rather than gain public support and 
approbation. 

To be able intelligently to register the pulse of public opinion 
demands more than the art of knowing words and type. It demands 
a feel for people — individually as well as collectively. It demands a 
warm heart, as well as a keen mind, and it demands an intrinsic belief 
in those three cornerstones of American democracy, Free Speech, Free 
Press and Free Assemblage. Nor can we demand the.se things for 
ourselves and at the same time, refuse them to our opponents. The 
measure of our faith in the democratic way of life is in great part 
determined by our willingness and ability to widen and deepen these 
three fundamental concepts in time of crisis. 

The strength of democracy in itself is determined by its ability 
to stand up under the withering fire of attacks from dictatorship, of 
the right and of the left. No single person or clique holds a monopoly 
on patriotism, just as no person or clique holds the answer to the 
problems of today, or a correct blue-print of tomorrow. 

You publishers and editors are always on the lookout for human 
interest stories, for you know that is good journalism. But why is it, 
I wonder, that so few of you have explored the channels of human 
interest stories behind your government. State and locally? And by 
this I mean, not the juicy stories of occasional scandals which are 
bound to occur, but the dramatic story of thirty thousand human 
beings on the State pay roll, rendering positive services on a hundred 
fronts, to the seven million inhabitants of this State. Government is 
not merely a creature of the people — it is the people. The Capitol at 
Sacramento, the numerous State institutions and all the rest — these are 
but the trappings of government — tools we make and use — but govern- 
ment itself is the people. Behind every set of statistics is at least one 
and perhai)s many definite liuman-interest stories. 

The Department of Public "Works, for instance, means more than 
just concrete and steel, bridges and roads and highways. It is a story 
of human beings fighting a never-ending fight against nature. It is 
the human story of highly skilled engineers and architects, of lowly 
stenographers, of traffic experts and a host of others. The human 
interest tale of these many personalities touches every town, every 
county in this State. Here is a vast, untapped living reservoir of 



PUBLIC ADDRESSES AND RADIO TALKS— 1940 



235 



stories for your press — the day to day tale of democracy in action. 
And this story is being retold a thousand different ways in each and 
every department of our State Government. 

Gentlemen, why not explore this field of human relations. I am 
not asking you to do publicity build-ups for our administration. 
Where shortcomings appear, come out and say so boldly and clearly. 
We welcome such criticism. But above all, tell the human story of 
human democratic government and how its functions may be improved, 
modernized, streamlined. By so doing, you will in a measure, help to 
create a greater feeling of faith in democracy. 

It must occur to you, as to all thinking citizens, that while our 
progress in the field of meclianical sciences is the marvel of the world, 
our progress in the science of democratic representative government 
moves so slowly as to impede if not defeat governmental efficiency and 
progressive political action. There is no reason why we should have 
any ox-cart inefficient governmental system, instead of modernized 
efficient system in every branch of the government. 

It seems to me you could and should open the discussion upon the 
most important issue on this subject which 1 hope we shall vote upon 
next November — the need for a reformed legislative system in Cali- 
fornia — one that will enable the legislative branch of the government 
to bring to its service in a one house body, members employed, and 
adequately paid to devote their full time to the consideration of legis- 
lation now so clumsily and inadequately dealt with by a two house 
system meeting for a limited time once every two years and called into 
special session only when most acute State emergencies require. 

Such emergency now is requiring a special session to be called this 
month. 

Foremost is the imperative need for new revenue to meet the man- 
dates of our Constitution and of the laws passed by the Legislature, 
including provisions for unemployment relief. 

We can not continue all of the governmental services required for 
the general welfare and demanded by the people without raising the 
revenue to pay for them. We can not continue borrowing money for 
current costs by way of issuing interest bearing warrants against foun- 
dations that are not supplied which proficient administrations have done, 
and which we are now being compelled to do at the rate of two million, 
five hundred thousand dollars per month. 

I ask you to please bring to your readers the true picture of your 
State's financial problem which has been furnished you by the Depart- 
ment of Finance, so that they may know the facts. 

Let the Legislature, if it can without injury to industry and 
causing greater human suffering than already exist in the State, 
eliminate any of the State 's services to the people now being performed, 
but do not let them tell you that they can continue these services 
without additional revenues. Do not let your readers be fooled by the 
false assertions that additional revenue is not needed, or be scared by 
the cry, "No new taxes." Do not let your readers be misled by the 
false propaganda that the revenue measure contemplated by this admin- 
istration will be "new taxes" on the home owner, the farmer, the small 
business man, the worker, or the general consumer. Because, for the 
most part, there will be new taxes on the net profits of big business. By 



236 



STATE PAPERS AND PUBLIC ADDRESSES 



doing this you will render a real service to your reader as well as to 
your State. 

On this and everj' other governmental question it is only necessary 
that the true issues and the facts become known to the people. They 
will then act intelligently and constructively. The successful working 
of our democracy depends upon the extent to which the people are 
actually informed. It becomes the duty of all who are engaged in the 
dissemination to the people at large to know the problem, the issues and 
the means by which their government functions. 

You, as publishers, and editors, must therefore be particularly well 
informed. You must be more than good reporters. You must also be 
economists, sociologists and political scientists in order to give to the 
community you serve tlie accurate information and intelligent direction 
which they see in you. 

The people should know their government and its function to make 
their government known to tliem. I suggest that you begin each week 
as "Know your Government AVeek" since the problems of government 
are not only so many but are so changing that no one can hope to get 
an adequate grasp of government and be fully qualified to discharge 
all of the responsibilities of citizens unless every week is made a "Know 
your Government Week. ' " 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



237 



HOUSING PROJECT 

Remarks at ground-breaking ceremonies at Ramona Garden Project 
of the Housing Authority of the City of Los Angeles, 
March 16, 1940 



My Fellow Citizens 

It gives me utmost satisfaction to take part in these ceremonies 
starting actual construction of modern, sanitary dwelling facilities, 
modest, practical and comfortable for those very families who are most 
in need of decent dwellings; for families of low income; for good 
American families whose children are to be the citizens of tomorrow; 
for families, who but for projects of this kind, would be condemned by 
the first necessity of their low incomes to live in hovels, slums, and in 
surroundings that disgrace a community and a state, endowed by nature 
with all that is beautiful and wholesome. 

This project, when completed, will help supply one of our most 
urgent social needs. That need is a decent American standard dwelling 
place for every neat American family with a modest but honest income. 

I lay special emphasis on the family because on the welfare of 
society's growing children depends the health and strength of society 
and of citizenship; and the child's welfare is the responsibility of the 
family. The family is the very foundation unit of all society. The 
family is indeed in itself, a society; limited, it is true, in numbers, but 
a true society of a man's own household, anterior of every state or 
nation, with corresponding rights and duties. 

America's future depends upon today's children. Children have 
rights, which are best served and conserved in the family. The order- 
liness and stability of family life and the future of the child are closely 
dependent upon the environment, the kind of home in which the family 
lives. Thus America's future is closely dependent upon our having 
decent houses in sufficient number for all Americans. 

The commencement of this low cost housing project makes me 
happy because it proves that this, my own commimity, recognizes and 
is dedicating itself to the solution of the problem of providing decent 
dwellings for families Avith meagre incomes. 

I also draw satisfaction from the fact that this project represents 
one of the practical ways in which local and Federal Government agen- 
cies can work together with beneficent social and economic results. 

It seems to be worthy of note that althoTigh this project gets under 
way because of the initiative and sponsorship of the National Govern- 
ment, the government is not supplying the money. It comes from 
private investory who are well secured by sturdy, fire resistent build- 
ings which will last at least sixty years. 

It is gratifying to know the measure of the employment instigated 
by this project, of the employment it will furnish for six hundred build- 
ing tradesmen for more than a year, right here on the site, and of the 
four or five hundred men who will be einployed off the job to manu- 
facture, fabricate and prepare the materials going into these buildings 



238 



STATE PAPERS AND PUBLIC ADDRESSES 



and to transport them to tlie job. And they are all to be paid the pre- 
vailinpr wa^res in their several crafts. 

Thus we find that jrovernment aprencies can pay standard waores 
and standard material prices and produce well planned, safe family 
dwellin<rs witli plenty of li<rht and air, and commodious safe-playing 
space for children, at nnbelievably low rent. 

It is true that these low rents are made possible in part by a modest 
annual federal subsidy. But it is equally true that the Federal Govern- 
ment jrets true value for its money in terms of improved social and 
economic conditions. 

Surely the community's savings, in terms of juvenile court costs, 
police and fire protection, reduced medical and hospital costs, and 
general good citizenship would easily underwrite and amortize the cost 
of this project, and the other similar projects now in preparation, and 
which I hope, will soon be under actual construction like this one. 

One of the characteristics of these days of uncertainty and inse- 
curity, is the dry -up of investment opportunities, with consequent stag- 
nancy in the channels of industry, commerce and demand I therefore 
see in Ramona Gardens, a symbol of great hope, sound hope for the 
future. 

Los Angeles, California, the whole Nation stands in greatest need 
of thousands, millions of low-cost, modest cost, dwellings such as we 
shall soon see here at Eamona Gardens. The fulfillment of this need 
can easily absorb a major share of America's investment funds through- 
out the coming decade. Thus it can easily be the basis for a sound and 
very worthwhile renewed prosperity. 

I cannot overlook this occasion to tell you that projects of this 
kind are needed not only in the thickly settled metropolitan areas of 
California, but throughout the richly productive farm sections. For 
reasons, too numerous and too complex to recount here, California now 
has within her borde?-s, scores of thousands of families, mostly farm 
folks, trying to find a place to settle down. This population has grown 
so fast that our powers of assimilation have been over-taxed. The imme- 
diate results, in some of our rural sections, are housing shortages and 
job shortages so acute that they present a serious State problem. 

We must have continued and increased Federal aid for the solu- 
tion of this distressing problem because of its broad and national origin. 
There is at least one front on which we can attack it very effectively; 
namely, by rural housing projects after the general pattern set here in 
Ramona Gardens. T have recommended legi.slation which is now pend- 
ing to enable and encourage such projects. T ask public support of its 
adoption. 

Many citizens and organizations are jointly and collectively respon- 
sible for the project celebrated by these ceremonies. Special recogni- 
tion and thanks are due to the labor unions and to the liberal and pro- 
gressive, social, political and religious organizations, and to the thou- 
sands of social-minded private citizens in all walks of life whose com- 
bined efforts and support have brought it to this bright and encouraging 
stage of development. 

In this decade, public housing will be recognized as far more than 
an emergency necessity. It will be recognized and accepted as a benef- 
icent and permanent fixture in the American scene. 



PUBLIC ADDRESSES AND RADIO TALKS— 1940 



239 



And now, in closing, I wish to pay special tribute to a man who, 
perhaps more than any other, is responsible for this beneficient project 
we are about to undertake. He has worked incessantly, month in and 
month out, sometimes against apparently insurmountable odds and 
obstacles. He has repeatedly sacrificed his own personal alfairs in 
interests of the achievement of his dreams of doing away with the sub- 
standard dwellings. I mean the slums of this community. And now 
his dreams turn out to have been very practical in effect as well as benef- 
icent in their intent. 

No one has better earned the right and the privilege of turning 
over the first shovel full of earth in this the official ground-breaking 
ceremonies at Ramona Gardens, the very first project of the Housing 
Authority of the City of Los Angeles. 

I refer to and I am proud and happy to introduce the Chairman of 
the Authority, the Hon. Nicola Guilii, 

Mr. Guilii. 



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STATE PAPERS AND PUBLIC ADDRESSES 



WESTERN AVIATION 

Address before Western Aviation Planning Conference, 
Fresno, March 30, 1940 

Mr. Chairman, Distinguished Gvests, Ladies and Gentlemen 
of Aviation and Friends 

A few years ago a conference such as we liave been lioldinjj today 
would have been considered by some charitable minded persons as in 
the nature of a philanthropic effort to help a puny industry which 
might or might not in the course of time prove to be worth the effort. 
But less charitable minded citizens — and I have found that there are 
some — might have suggested that a Governor who called such a con- 
ference was a bit flighty — and they would not have been thinking of a 
flight in aircraft. 

Today this conference has other aspects and undeniable significance. 
Flight in aircraft truly widens one's horizon and that which yesterday 
seemed dim and perhaps only imagined on a far horizon, today is 
behind us. 

There has been completed one full year of scheduled air tran.sport 
operation — the carrying of tAvo million three hundred thousand persons, 
eight hundred and fourteen million passenger miles, without a single 
passenger or personnel fatality. Tliat is a record, which T am told, sur- 
passes, from the standpoint of safety alone, the highest attainment 
heretofore of any form of transportation. And yet, adding stupen- 
dously to the impressiveness of that achievement of safety is the fact 
that it was done with comfort and speed approximating three miles 
per minute. 

Gentlemen of aviation, congratulations! You of the Civil Aero- 
nautics Authority; you who operate these air lines; you who pilot the 
planes; j^ou who service them; you who design and manufacture them; 
j'ou who observe and report weather; you who through radio aids have 
made the ears of a pilot serve also as eyes when the atmosphere is so 
thick that ocular vision no longer can penetrate it, but the radio waves 
of your making function as a beam leading the ships of the air safely 
home — and to all of you others who contribute so well and so much to 
safety and efficiency in aviation — our profound respect. 

We respect you the more for the likewise splendid records achieved 
in the Civil Aeronautics Authority Civilian Training program — -that is 
student flying by those students who have accomplished the feat of 
keeping airplanes in the air one hundred and eighty thousand hours; 
of having traveled thirteen million airplane miles and twenty million 
passenger miles with but one fatality. 

So, also, the provision for a uniform flight instruction syllabus is 
a great step for safety. 

I wish al.so to accord due tribute to this group of men who com- 
prised the committee for this Western Aviation Planning Conference 
and those who have assisted them in arranging all of the details which 
have made possible the holding of this meeting. The scheduled subjects 



PUBLIC ADDRESSES AND RADIO TALKS— 1940 



241 



of addresses and the entire plan of the Conference all evidence the study 
and clear thought which have been devoted to the matter by them. 

Aviation is on the wmg. "We of California and of these Western 
States want to keep pace with you. From your take of£ a few years 
ago — a somewhat halting and wobbly one at times, to be sure — ^you have 
been gathering speed and climbing high and going far. 

"We must look to it that aviation equipment and personnel do not 
outdistance ground facilities and governmental facilities. Because we 
are mindful of these things and Avish to know your problems, present 
and anticipated, so that we may the better serve you, we have called 
this conference. "We thank you for attending. "We shall endeavor to 
serve you better because you help us by coming here. 

In my conception of duty, always is it the problem of government 
to better serve the people who set up that government and for whose 
convenience and welfare government is maintained. "When we do not 
look to the future, we do not serve well the present. And particularly 
is this true in aviation where that which appears so far in the distance, 
so quickly passes below and behind. 

This administration in California conceives of government and all 
governmental agencies as being set up by the people to serve their 
interests. "We have no room in California State offices or agencies for 
any person who believes that the governmental office was created for the 
benefit of an office holder. We have come to respect and to like the 
persons of the Civil Aeronautics Authority because we have found in 
them the same conception of governmental duty as have we. We have 
found them sincere and imbued with a desire to serve, not themselves, 
but the cause they love; that cause too is our cause. 

We appreciate the fact that many thousands of families in Cali- 
fornia find support in this great industry. You have every right to 
expect your Governor and your governmental agencies to lend a ready 
ear to your problems. We want to serve you, and through you, avia- 
tion, even as you have served it. I want to know your questions and 
your needs and I want California to join with you in trying to get the 
right answers. 

There is no industry in all of California that I rate of more import- 
ance to the State or the Nation, than yours. You will always find my 
office, my mind and my heart open to you. 

Airplanes and pilots are multiplying. We can not overemphasize 
or exaggerate the importance of an adequate airport program from the 
standpoint of military aviation, yet we are no longer in the stage of 
development of aviation where we need use National Defense as an 
excuse for an airport program. 

Countless thousands of our people are taking to the air in this most 
efficient and modern of transportation methods. Your safety record, 
zealou.sly maintained, will multiply confidence in aviation and confi- 
dence in aviation will multiply your passengers and your customers. 

Public necessity itself demands not only adequate airports, but an 
abundance of airports. We must not by lack of vision or lack of 
industry, permit lack of airports to bottleneck your industry. 

Under the guidance of our wise and farseeing national administra- 
tion, the Civil Aeronautics Authority has been created. It has been 
manned and staffed and with some difficulties, to be sure, but withal, 



242 



STATE PAPERS AND PUBLIC ADDRESSES 



eflSciently, has taken over the duties of the former Bureau of Air Com- 
merce of the Department of Commerce. 

The safety record we have commented on, the Civilian Training 
proprram, the Uniform Fliprht Instruction program, are all to its 
resounding credit. It is fitting that we find it concerned now with the 
airport development program. 

Aviation is peculiarly an inter.state activity. State lines mean so 
little and pass so quickly when traveling by plane. Airports adequate 
in number, in capacity, in stamina, in aids to flight and the other facili- 
ties of service to equipment and personnel are as essential in one State 
as in another — essential not merely to the State in which they are 
located, but to the convenience of the people of the Nation who more 
and more, through aviation, and the radio, are becoming a more closely 
integrated, though far traveling family. 

So it is entirely proper that a Nation-wide program of airport 
development be instituted and supervised, in at lea.st a general planning 
sense, by the national agency, the Civil Aeronautics Authority. Cali- 
fornia and this Governor appreciate the interest of the Civil Aero- 
nautics Authority and offer it whole-hearted cooperation. 

Frankly, we need your help, as you need ours. Today in the center 
of our great aircraft manufacturing activity in southern California, 
there is an immediate and urgent necessity for more airports and air- 
port facilities. Every night and day scores of airplanes, carefully 
engineered and built and maintained, are forced to sit out in the open, 
unhoused, because airport facilities are inadequate. 

Visualize our problem a few months hence when nonscheduled 
aviation — the once forgotten in California — had had the opportunity 
to feel the full impetus of the first year of the twenty thousand men 
per year training program. 

Private aircraft factories as well as air transport and military 
design producers are working at top levels. Yet. airport development 
has been stagnant since capital discovered a few years ago that aviation 
had perils of investment as well as of flight. And capital on that score 
could not be blamed. Land conveniently situated for an airport, with 
approaches free from buildings — though too often not free from unfor- 
givable high wire hazards — when developed for airport use and repre- 
senting a large investment, has. because of rapidly changing density of 
population, become the center of housing activity, and the poor airport 
investor has faced legal actions to abate his airport as a nui.sance. 

Likewise, acreage which once would have been economically avail- 
able for dedication, or at least preserA'ation for, airport use. has become 
subdivided or otherwise rendered less available and more costly while 
at the same time need for it for that has become greater. We build 
highways for our automobiles. "We must build airports for our planes. 

Federal aid in airport or other aviation development is entirely 
appropriate. Throughout our bistorv the Federal fiovernment has 
recognized the necessity and public benefit of developing transportation 
and communication systems. Rivers, harbors, canals, railroads, high- 
ways, all have been developed under the generous assistance of the 
Federal Government. Transportation by air we hope is about to receive 
that same generous assistance. 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



243 



Our State administration in California has consistently been on the 
alert to see that one hundred cents' worth of good is received from every 
dollar it spends. This conference is in line with our fixed policy — to do 
our best to be, not good politicians, but to give you good, efficient gov- 
ernment. We have sought to bring together representatives of all 
agencies familiar with the aviation picture so that whatever funds we 
get when made available may be used in those places where the greatest 
possible good Avill result to the whole industry and hence to all the 
people it serves. 

There have been introduced in the United States Congress bills 
providing the necessary funds and legislation with which to start this 
development. We bespeak your help to see that that legislation is 
passed and the funds appropriated. I hope that Congress will not be 
of a mind to deny us these desirable measures. 

There is needed in the several states aviation bodies or agencies 
to work with the Federal organization in this airport development 
program. I do not imply that we need any State regulatory body to 
duplicate any element of the work of the Federal body. We do not 
wi.sh to regulate aircraft or control its operation or qualify or regulate 
flying or service personnel. California believes in leaving entirely in 
the capable hands of the national body, the Civil Aeronautics Author- 
ity, those matters which are so essentially interstate or national and 
uniform in their applications, but I do mean that we want and shall 
have some reasonably adequate agency to be devoted to aeronautics. 
In accord with the recommendation of this conference, and with your 
help, I shall be happy to select and appoint a State advisory committee 
on airports to receive information and to confer with and advise and 
assist the Governor and the State agency which will handle the Federal 
funds when they are made available, to the end that aviation and the 
people it serves shall derive one hundred cents worth of advantage 
out of every dollar that comes here and so that our system of airports 
in California in accord with a States' master plan of airports as 
approved by the Civil Aeronautics Authority may be most economically 
and efficiently attained, and so that California, even as she leads in 
aircraft production and highway development, may be also at the fore- 
front in those facilities which will make us better aviation neighbors 
to our esteemed sister states, Utah, Nevada and Arizona, who have 
honored iis with representation here, and so that all of us may cooperate 
to the end of better facilities for convenient and safe operation of the 
aircraft of the Nation for the benefit of the people of the Nation. 
Through a sane program of development instituted by the Federal 
authority and joined in by all of us, we will revise the old adage to 
read, "You're not crazy to fly — and it doesn't help." 



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STATE PAPERS AND PUBLIC ADDRESSES 



OUR MENTAL HOSPITALS 

Address given over California Radio System, 
April!, 1940 

My Fellow Citizens 

This evening I sliall talk of the several distinct advances achieved 
during tlie past year, in the institutional care of mentally sick people 
in the State of California. These advances are most remarkable and 
have real meanini; to the people in terms of more humane care for 
mentally distressed persons, hope for their complete recovery and 
rehabilitation and much lower costs falling upon the taxpayers. 

California maintains seven hospitals for mental patients, two 
institutions for epileptics and for the feeble-minded, three correctional 
schools, a narcotic hospital, one home and two work shops for the adult 
blind, and a Bureau of Juvenile TJeseareh. All of these are organized 
under and administered by the State Department of Institutions under 
the direction of Dr. Aaron A. Rosanoff. 

In appointing Dr. Rosanoff to this post, I drew into the State's 
service one of our country's leading scientists, if not the leading 
scientist, in the field of mental sickness. He took his medical doctor's 
degree at Cornell in 1901. For many years he was the clinical research 
director and the manager of New York City's famous King's Park 
State Hospital. During the world war he served in the psychiatric 
division of the Army's Medical Corps, rising to the grade of Lieutenant 
Colonel. 

Since coming to California in 1923 he has followed the general 
practice of psychiatry, and lectured at the TTniversity of California at 
Los Angeles, at the T'^niversity of Southern California, and at the Loma 
Linda Medical School. He is an active member of. and has served as 
President of the Southern California Mental Hygiene Society; also 
of the Academy of Criminology. 

lie is the author of a "Manual of Psychiatry" which has gone 
through seven editions and has, for many years, been the standard 
textbook on this subject in most American ]\Iedical Schools. 

Since Dr. Rosanoff could enjoy a much easier life and earn a far 
greater income if he followed the private practice of his profession, I 
regard his acceptance of his present post, his work as Director of 
Institutions, as an extraordinary public service. 

In all, more than 28,000 patients and inmates are cared for in 
these institutions. I haven 't the time to here describe all of the activi- 
ties of all of them. Therefore, I shall touch just briefly upon the work 
of the seven mental hospitals. From the standpoint of numbers, they 
are the most important divisions, because they take care of more than 
23,000 patients ; or 82 per cent of all cases cared for by the whole 
Department of Institutions. 

Until only a few years ago, such institutions were commonly known 
as "Insane Asylums." We now call them State Hospitals. 

What 's in a name ? 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



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Due to developments since the turn of the century, principally in 
the past two decades, there is all the difference in the world. The 
Insane Asylum was thought of as a place for the custody and actual 
confinement and restraint of irresponsible and dangerous people ; not 
so much for their own good, but mainly for the protection of other 
people, many of whom regarded these unfortunates with an almost 
superstitious horror and aversion. 

A "Hospital" on the other hand, is a place for the medical and 
surgical treatment of the sick; in this case, persons whose sickness has 
mental as well as physical manifestations and symptoms. 

And that is exactly what has taken place, although very slowly. 
The State still does confine and restrain those so sick, mentally, that 
they are dangerous. But we are devoting increased attention to the 
prevention of mental illness, and the rehabilitation of those afflicted. 

The job of the seven State hospitals is essentially a technical one ; 
not political, not economic, not social ; although, of course, the job has 
its very important political, economic and social implications and 
involvements. I have already told you that the seven hospitals care 
for more than 28,000 patients. Now more than half of them suffer 
from just one disease, technically known as "Dementia Praecox" or 
' ' Schizophrenia. ' ' 

Up until five or six years ago, this was known as affecting mainly 
young men and women, usually chronic, usually mild in its initial 
stages and sometimes scarcely noticeable even by members of the 
family, but usually running a course of progressive mental deteriora- 
tion ending in confusion, idiocy and death. Our hospitals reported 
a recovery rate of only 8 per cent. 

But now the whole picture is radically changed due to the intro- 
duction of a new treatment devised by Dr. Manfred Sakel, a Viennese 
Psychiatrist. It is known as "insulin-shock," and it is found that this 
therapy applied to cases of dementia praecox or Schizophrenia, if 
caught in their early stages (say within a year of its onset) yields a 
recovery rate of 70 per cent. 

When we realize that therefore the average dementia praecox 
patient has required twenty-three years of hospitalization, ending with 
only death, and has cost the State $4,700; when we realize that the 
insulin-shock treatment lasts only three months, costs the State only 
$315, and returns 70 per cent of the patients, fully cured, to their 
homes, their families, their jobs and completely normal living, then 
the benefits to society of such a treatment are immediately and fully 
apparent. 

But the problem of securing these benefits has been a serious one. 

The full course of this treatment requires about three months. It 
can be given onlj^ in properly equipped hospitals and only by specially 
trained technicians. 

It therefore has been so expensive that only the rather well-to-do 
could afford it ; but today, in California, the insulin-shock treatment 
is provided at Camarillo State Hospital, for cases in the south, and at 
the Stockton State Hospital, for cases in the north. Henceforth, no 
one in California, no matter how poor, will lack the opportunity to 
receive this treatment if his case requires it. 



246 



STATE PAPERS AND PUBLIC ADDRESSES 



Because the insulin-shock method is so new, and because its admin- 
istration calls for hig:hly skilled technicians, there are, as yet, in all 
the world, only a very few physicians who are qualified to administer 
this treatment. 

Dr. Rosanoff, the Director of Institutions, scoured the entire 
country to find a properly qualified person to introduce this treatment 
in our State hospitals. lie finally found just one, and that one was 
available only because of the fortunes of war, so to speak. 

It is an ill wind that blows nobody good. The European wars, 
and the preparations for war, and the persecution of Jews in Germany, 
Austria, Poland and elsewhere, resulted in the uprooting of Dr. Jacob 
P. Frostig from his native home in Central Europe and his landing 
in New York City. 

Dr. Frostig just happens to be one of the handful of men and 
women who conducted original researches which led to the discovery 
and development of insulin-shock therapy. We are most fortunate to 
have his services. 

But inasmuch as he is a refugee from Poland, with all his bridges 
burned behind him and inasmuch as he is not yet a United States 
citizen, nor even licensed to practice medicine in California, it was 
necessary, in order to conform with California's civil service and medi- 
cal practice laws, to first arrange for his appointment to the faculty of 
the University of California Medical School. Thereupon, the Depart- 
ment of Institutions contracted with the University to purchase Dr. 
Frostig 's services as instructor for the medical staffs of the State hos- 
pitals in the details and techniques of insulin-shock therapy. This 
may seem a very roundabout procedure, but it is fully justified by the 
great and beneficent purpose now already in course of accomplishment. 

Dementia praecox is the most prevalent of all mental diseases. 
In ever-increasing numbers, it has half filled all of our mental hospitals 
for generations. But from now on, this disease will be given not 
merely custodial care, but skilled therapy where its recovery rate will 
be raised nine-fold. The consequent gain by society is inestimable. 

Another major advance achieved under Dr. Rosanoff 's administra- 
tion of the Department of Institutions was announced soon after he 
entered ofifice : nanieh', the treatment of certain types of mental dis- 
orders by fever induced by means of malarial inoculations. These are 
now furnished to all pei'sons referred to our State hospitals by health 
officers and other physicians. Some very spectacularly successful 
results have been obtained. 

By this fever treatment, persons having syphilis in the third stage, 
where it has attacked vital organs with involvement of the central 
nervous system, can be saved from paresis, which is an extremely 
severe form of insanity of syphilitic origin. If only all those needing 
this treatment would take it, then another large group of cases, now 
accounting for 7 per cent of the inmates of our mental hospitals, would 
be eliminated. 

It may be safely predicted that this treatment, together with the 
campaign against venereal disease, inaugurated in recent years by the 
United States Public Health Service with the collaboration of our State 
Department of Health, will produce, in the course of the next few years 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



247 



a steady reduction of cases of syphilitic insanity in our State hospitals ; 
with corresponding benefits to all of society. 

Nearly one third of all the admissions to our State hospitals are 
for alcoholism. In the great majority of these eases there is no insanity. 
Alcoholic patients soon become practically normal and, in most cases, 
very helpful in all kinds of work to be done around the hospital. 

But the mental hospitals can hardly be regarded as the most con- 
genial places for these patients. Yet, experience has shown that they 
must not be discharged too soon by reason of their strong tendency to 
return to their drinking habits, and so, large numbers of them come 
and remain to further crowd the already overcrowded wards. 

To meet this pressing condition, the department at the 1939 session 
of the Legislature, sponsored a bill for the establishment of a special 
colony for inebriates. Such a colony is soon to be opened at Spadra. 
It is to be an agricultural and industrial colony and should eventually 
become largely, if not entirely, self supporting. 

If it proves successful, it will be enlarged from a capacity of 200 to 
one of 1,000 beds; and a similar one will be established in northern 
California, thus relieving the State hospitals of the task of taking care 
of inebriates, while providing for the latter a better and less costly 
type of care. 

In times past, the State hospitals have had to keep on caring for 
many patients who were cured and ready for return to society but who 
could not be returned because there were no relatives or friends to 
whose care they could be committed while making their adjustments 
with the outside world. The Department of Institutions now arranges 
for the release of such persons on parole to and under the supervision 
of trained social workers. 

Last but not least, I would mention the new one hundred bed hos- 
pital to be established by the Department of Institutions in San Fran- 
cisco on the gi-ounds of the University of California Medical School. 

The principal purpose of this new hospital is to bring to a realiza- 
tion the ideal of early diagnosis and prompt treatment of mental dis- 
orders, thereby raising the recovery rate to a figure approaching, as 
closely as possible, the level of 100 per cent. This will not be an asylum 
for the insane, to which patients with advanced brain disease are com- 
mitted by the courts, as a desperate measure of last resort, to remain 
there as inmates for the rest of their lives. This is to be rather a hos- 
pital where treatment will be provided for selected cases with a view to 
saving them, by timely intervention, from a possible destiny of insanity, 
commitment, and permanent incarceration. 

This new hospital is to have an out patient department. It is 
mainly from the clientele of thjs department that cases will be selected 
for admission to the hospital. The best known methods of treatment 
will be provided. It will be the only hospital of its type in the country 
equipped with a department for brain surgery. 

The new hospital will be a center of training in nervous and mental 
diseases for medical students ; also for graduate students who may wish 
to specialize in this branch of medicine. 

The new hospital will also be a center of research, to add to our 
knowledge of the nature and causes of mental disorders. No better 



248 



STATE PAPERS AND PUBLIC ADDRESSES 



conditions for such research could be devised than those which will 
result from the proposed partnership of the University of California 
and the Department of Institutions, to be concentrated in the new 
hospital. For this partnership will bring together a vast amount of 
clinical material to be studied, well equipped laboratories in the funda- 
mental sciences, and highlj^ qualified scientific personnel. 

All in all, the State Department of Institutions, with its very able 
staff and under the able leadership and administration of Dr. Rosanoff, 
is achieving spectacular success in the treatment of mental diseases. 
They are doing this by humanitarian methods in the handling of 
patients and by the application of scientifie therapies. They are doing 
it quietly, they are doing a great work in a field to which the lay 
citizen pays but little attention. I am therefore correspondingly grate- 
ful to all of you who have listened to my remarks this evening about the 
State Department of Institutions. 

I thank you and bid you good night. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 94O 



249 



DEMOCRACY CAN ACT 

Radio address over California Broadcasting System, 
June 16, 1940 

It would not be timely at this hour to speak of any other subject 
than the possible consequences of Germany's defeat of the Allies to 
the future of our country. Nothing could be more frustrating to the 
American people than the immediate situation in Europe. We stand 
by, practically powerless to influence the outcome of the decisive 
struggles going on there. That outcome just now is so imminent that 
there seems to be little or nothing we can do quickly enough to effec- 
tively help the Allies. 

Nevertheless, the outcome is so fraught with danger to our own 
country that this inability to be an effective factor in the present 
struggle frustrates and confiises — at the every moment when, of all 
times, we need most to think ; to think calmly and clearly — in order 
to act wisely and effectively, as well as swiftly. 

That we are deeply stirred by European events is proved by the 
widespread demand that our country act heroically. That we need 
to do some very real, very hard thinlting is proved by the fact that 
these demands are made, in most cases, Avithout any well-thought-out 
ideas about just what form such heroic action should take. 

We have been shocked, deeply shocked, by the turn the war has 
taken in the past 30 days. Rudely awakened, but now with our eyes 
wide open, almost spontaneously — as a Nation — we have initiated the 
steps required for the military and naval defense of our shores and 
possessions; the steps dictated by considerations of the most ordinary 
prudence. The very promptness with which we have done this demon- 
strates at least one thing, namely: that a democracy can, in times of 
stress, agree quickly upon what course to pursue. And I shall be well 
satisfied wath my remarks this evening if I convey to you my deep 
conviction on just this one point, namely : that democracy can act. 

If we do not believe this, then all our military preparations will- - 
come to naught. But if we do believe it, then we are invincible, and 
we shall save our liberties. 

I wish this evening to briefly discuss the nature of the new and 
special problems with which the European war now confronts us. 
I do this, not with the idea of conveying the impression that I have 
the solution for these problems, but rather in the hope of promoting 
wide discussion. I am convinced that wide discussion will serve not 
only to allay hysteria, but to ery,stallize, out of the solution of public 
opinion, the favorable public sentiment without which our plans for 
the national defense, no matter how sound they may be, can not be 
successful. 

To attempt a forecast of the long range effect upon our country 
of the European cataclysm would be quite rash. Most assuredly, 
America must keep out of it. But, whether we succeed or fail in our 
decision to stay out, it requires no expert, no seer, to forecast that its 
effect upon us will be profound. It would seem that the whole world 

17—18527 



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STATE PAPERS AND PUBLIC ADDRESSES 



must now look forward to the most far-reaching changes; political 
changes; economic changes; and, perhaps even more important, ideo- 
logical changes. Indeed, it may well be that in the long run, ideas 
■will count for far more than guns. 

Our own disposition is to keep our soldiers out of Europe — and 
rightly so. In any case, it looks as if w^e could not do enough, quickly 
enough to help the British and the French in their present dire distress. 
In view of these facts, if they finally defeat Hitler, our international 
problems will be less serious. But if Hitler conquers them, then we 
shall be confronted with problems of the most serious nature. 

AVe must prepare to meet these problems. 

In either case, our primary job is to preserve democracy and free- 
dom in this, our own country; w^hetlier from Hitler's military hordes 
or from his ideology. 

Now as a matter of cold practicality, to do this will take a great 
deal more than the passing of resolutions and the appropriating of 
billions of dollars. As the Chief Justice of the United States Supreme 
Court, Charles Evans lluahes. said only a few weeks ago: 

"You can not maintain democratic institutions by the forms of 
words or by taking occasional vows. You maintain democracy by 
making the institutions work as they are intended to do with full 
confidence of the people." 

It is to the extent that we make democracy work now, that we set 
an example, fashion a pattern, for a better, saner order of things. 

What, then, does it seem we must do to save our liberties? 

First, pursue our National Defense Program with the greatest 
energy and vigor of which we are capable. 

Second, we must profit from the hard lessons of the present war, 
and realize that we can not separate the solution of our defense prob- 
lem from the solution of our general economic and social problems. 
Therefore, we must also go to work on the economic front and even 
on the psychological front, as well as the military. In other words, 
as Chief Justice Hughes says, we must make our democratic "institu- 
tions work as they are intended to do with full confidence of the 
people." 

What is meant by this? Specifically, that we must solve and 
eliminate the problem of unemployment. We mu.st solve and eliminate 
our fiscal problems by taxation geared to the tasks confronting us. 
We must rehouse and reclothe the Nation at the level of American 
standards; standards which all our people will realize are worth 
defending; standards which no totalitarian dictator's propaganda ean 
successfully attack. 

We mu.st build up and defend the national health by making our 
ample medical, hospital and health services available to all citizens. 

We must stop the profligate export and wa.ste of the basic raw 
materials of national defense. These include oil, copper, steel and 
lumber. 

We must set to work seriously to plan our economy. We are 
compelled to do it now for purposes of defense. We should have been 
doing it long since, for purposes of peace. 

We must solve the unemployment problem, if only to increase our 
defense effort. But there are other equally good reasons. We must 



PUBLIC ADDRESSES AND RADIO TALKS— 194O 



251 



reemploy ten million workers in order to increase our national income. 
It will be far easier to pay the cost of armament for defense out of a 
large national income than out of our present small one. In doing 
this, we are certain to discover shortages of skilled workers of many 
types. Plans for greater income and preparedness for defense will 
require greater attention to the education and training of adults, as 
well as youths, for skilled services and greater efficiency in all lines 
of productive activity. The natural tendency of private enterprise 
to concentrate and to stifle industrial output through the medium of 
unnecessarily high prices is a stumbling block which must be overcome 
in a program for greater production ; and, in the expenditure of billions 
for military, naval and air forces, we shall find it difficult to prevent 
profiteering. 

This is all the more reason for reforming, revising, realigning 
our tax system to match the realignment of economic facts and forces 
confronting us. Not only can we tax unreasonable profits, but we 
must if the cost of defense is to be made to fall where it should. We 
now have a tax system that chokes consumption, reduces production, 
and places a far too great proportion of the taxload on those least able 
to bear it. We should- — we can — have a tax system that will stimulate 
our national defense effort and pay for it, by taxing wealth and ability 
to pay. While we encourage our young manhood to voluntarily enlist 
and prepare to draft them for military service if necessary, let us 
prepare also to draft property and wealth wherever it is concentrated 
and whenever it is needed. 

As for economic planning, had we gone in for it years ago, as we 
should have, it would be far easier to plan for possible war now. We 
found this out during World War No. 1 ; but have since forgotten or 
disregarded it. We are beginning to reawaken to the fact that to plan 
our economy efficiently for national defense and rearmament we must 
plan it for the necessities of peace also. Both Britain and France now 
learn to their great sorrow, that a Nation, if it is to be successful in 
war, can not subsidize its fighting forces and otherwise continue with 
a hit-or-miss, unplanned, business-as-usual economy. The Nation which 
is successful in war, makes war as a whole ; and in so doing it includes 
the activities that are normal to peace time. Therefore, we should 
plan for food, fuel, housing, clothing, medical service, full employment, 
efficient farming, and all the other major concerns of society. Full 
stomachs are as necessary to our preparations for defense as are muni- 
tions, planes and battleships. 

At the same time we should remember that a certain very positive 
danger to our American liberties and democratic institutions is inherent 
and implicit in war planning. The great danger is that before we ever 
meet an enemy in battle we shall have surrendered the very liberties 
it is our purpose to defend. 

I regard this as a very real peril against which extraordinary pre- 
cautions must be taken, lest we get all the repressions and injustice 
and intolerance of totalitarianism without even its war efficiency to 
balance our loss. This danger tests the democracy which we prepare 
to defend. 

Many hysterical suggestions are being made. Let us remain cool 
and collected. Let us not declare a moratorium on political democracy 



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STATE PAPERS AND PUBLIC ADDRESSES 



aud debate. Let us not concern ourselves only with foreign affairs and 
defense, to the exclusion of our domestic problems; those of creating 
a better life for the American people. We must not abolish such social 
gains as collective bargaining, minimum wages and hours. We can not 
afford to balance the budget by abolishing relief and recovery expendi- 
tures. All of these things, and more, are actually proposed in some 
quarters; and it would be easy to do them. But it would leave us 
defenseless. 

We must retain our customary democratic, elective institutions and 
practices. Our democratic civilian government, under an elective chief 
executive, must remain firmly in command. 

I see no reason why our Nation, with all its resources — manj'^ of 
them unused — can not and should not have a military establishment 
capable of repelling any conceivable attack, and still have enough left 
over to abolish poverty and unemployment, to rehouse the Nation, and 
to raise the American standard of living to a level hitherto unknown. 

I have here tried to convey my conception that the problem of 
national defense is both military and civil ; both economic and political ; 
both social and ps^'chological and that it requires attack on all fronts. 

California has heavj^ responsibility in the National Defense Pro- 
gram. T have, therefore, appointed a highly representative group of 
men and women, leaders drawn from all walks of life, to serve on the 
State Council of Defense. It is their high purpose to study and plan ; 
to organize and coordinate ; to cooperate with the President 's National 
Council of Defense; to help California to make the maximum contribu- 
tion of which she is capable. 

The State Council will meet at Sacramento a week from tomorrow 
to organize and to "undertake its labors. 

I thank you and bid j-ou good night. 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



253 



THE COMMUNIST PARTY IN CALIFORNIA 

Radio address over California Broadcasting System, 
October?, 1940 

There has been growing public sentiment in California in recent 
years against the recognition of the Communist Party as an American 
Party entitled to a place on the election ballot. 

At this critical time in the world 's history and in our international 
relationships, that sentiment against alien controlled parties in the 
United States has virtually become a demand for legislative action. 
It has been aggravated by the scurrilous methods and abusive manner 
in which Communists either openly or under cover, carry on their 
political activities. It has been further aroused by such reports from 
Europe as that made by the liberal American Ambassador to France, 
Mr. Bullitt, upon his return to the United States, from which I quote 
the following: 

"In France much of the most terrible and traitorous work was 
done by the Facists and Communists working together. Many honest 
French democrats and liberals had been snared by Communist propa- 
ganda and argued that, because the Communists called themselves a 
political party and pretended at the time to be in favor of democracy, 
it would be undemocratic to deny to the Communists the rights of any 
other political party. The honest French patriots and democrats who 
protected the Communists did not discover until too late the Com- 
munists were acting as spies and agents of the dictators, that the Com- 
munist party was merely camouflaged as a political party and was in 
reality a conspiracy to commit patricide at the direction of a foreign 
dictator. They discovered too late that the Communists were traitors 
who were claiming the protection of the State which they intended to 
destroy only in order the better to prepare for its destruction." 

At its special session held on last September 21st, both houses of 
the Legislature, by a vote which was almost unanimous, only one dis- 
senting vote being cast in the Senate and only three dissenting votes,- 
being cast in the Assembly, passed a bill which is now on my desk, the 
substantive parts of which are as follows : 

First: "No party shall be recognized or qualified to participate in 
any primary election which uses or adopts as any part of its party 
designation the word 'communist' or any derivative of the word 
'communist' ". 

Second: "No party shall be recognized or qualified to participate 
in any primary election which is directly or indirectly affiliated, 
* * * with the Communist Party of the United States, the Third 
Communist International, or any other foreign agency, political party, 
organization or government, or which either directly or indirectly 
carries on, advocates, teaches, justifies, aids, or abets the overthrow 
by any unlawful means of, or which directly or indirectly carries on, 
advocates, teaches, justifies, aids, or abets a program of sabotage, force 
and violence, sedition or treason against, the Government of the United 
States or of this State. ' ' 



254 



STATE PAPERS AND PUBLIC ADDRESSES 



A hearing!: was given the Chief Officer of the Communist Party in 
California by the Legislature in protest against the passage of this 
bill. But inasmuch as complaint was made that opportunity was not 
given for a more extended hearing of all persons who wished to be 
heard in opposition to its enactment, I have taken time to receive and 
read all communications and arguments that have been presented to 
the Governor's office against this bill. I have also given hearings to 
committees which have presented themselves for oral argument in 
opposition to the bill, and received and carefully considered their 
written briefs and legal arguments made against the same on the ground 
that it violates constitutional rights and American Civil liberties. 

American principles of civil liberty require that when any act 
is questioned on the ground that they are violated, the utmost toler- 
ance and dispassionate consideration should be given the question, and 
that no decision with regard to it should be influenced by hysteria, 
emotion or prejudice. For that reason I have carefully analyzed this 
bill, particularly from the .standpoint of safeguarding the fundamental 
principles of American civil liberties. 

It would seem that few, if any, American citizens could be found 
objecting to the disqualification of a party affiliated with a foreign 
government or which advocates the overthrow by unlawful means of, 
or a program of sabotage, force and attack against the Government of 
the United States or of this State. Yet even at this time, when emer- 
gency measures are necessary for our National and State defense, there 
are some who would object to such a general act. In the name of 
democracy and civil liberties, they Avould give legal recognition to a 
foreign controlled party set up for the purpose of abolishing democracy 
and civil liberties by any means whatsoever. Such irrational objec- 
tions can not be reconciled with a sense of loyalty to American insti- 
tutions. 

I do not find in this bill any impairment of the right of freedom 
of speech or of assembly or any of the civil liberties guaranteed by the 
American constitution. There is not a word in the bill which would 
suppress freedom of thought, freedom of speech, freedom of assembly 
or the freedom to advocate any system of economy or any form of 
government in the United States. There is not a word in the bill which 
would disqualify, for a place on the ballot, any American party 
devoted to the elimination of the capitalist system and the establish- 
ment of Socialism in the United States. 

I doubt that any informed American citizen, either from the right 
or the left of the American political scene, would rise to demand that 
a place on the American ballot should be denied any party like the 
Socialist Party of the United States which, lancontrolled by any foreign 
agency, opposes the capitalistic system and advocates the socialization 
of American industry by constitutional and legislative methods, through 
democratic election processes. 

"With regard to the designation of the Comjnunist Party as being 
disqualified because it is the Communist Party, the Legislature has 
apparently done this upon what it considers to be common knowledge, 
that the Communist Party of the United States is a party which is 
directed by and affiliated with a foreign government or foreign politi- 
cal partj' or agency affiliated with a foreign government, or which 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



255 



advocates the overthrow of the Government of the United States and 
of this State by unlawful means, or advocates sabotage, force and vio- 
lence, sedition or treason against the United States or this State; 
instead of leaving it to the courts to decide whether the Communist 
Party is in fact such a party. 

The act contains the clause that if any of its provisions, or the 
application thereof to any person or circumstance is held invalid, the 
remainder of the act, and the application of such provision to other 
persons or circumstances, shall not be affected thereby. 

The intent of the act is that the courts shall decide whether any 
clause is unconstitutional. 

It is undoubtedly a fact that the Communist Party's own publica- 
tions, the sworn statements of its officers, and its own actions in line 
with directions received from agencies in a foreign nation are relied 
upon to show that this party does come in the classification of a foreign 
controlled party and for that reason should not be entitled to legal 
recognition in the political life of America. 

This bill does not go so far as to outlaw Communists or even the 
Communist Party. In prohibiting that party from participation in 
the primary election, it does not make the profession of Communist 
doctrines a crime nor forbid the organization of a political group or 
of a party that professes Communist doctrines or that calls itself Com- 
munist. It does not prohibit the organization of a group that is affili- 
ated or means to affiliate itself with the Third Communist International 
or any other foreign political organization. It does not deprive such 
persons of their vote nor prevent them from voting for candidates of 
their own designation at the general election. It is, therefore, not a 
bill of attainder. 

It does, however, discriminate against the Communist Party by 
depriving it of the facilities given to other parties in the general elec- 
tion because it is more difficult to write in names than to stamp a cross 
upon a printed name under a party designation. 

And assuming that the Communist Party is not a criminal party; 
that is, that a purpose to overthrow government by unlawful means or 
that treasonable activities can not be imputed to that party or its mem- 
bership, can it be said that if it is affiliated with a foreign group like 
the Third Communist International, directed not by representatives of 
the Communi.st Party of America but by foreign agencies and foreign 
personnel, that it would be an unreasonable and unconstitutional dis- 
crimination to deny it the legal right to continue to receive recognition 
in our elections? If so, then no act which preserves the American ballot 
for use of American parties would be held reasonable and valid. 

It is admitted by the Communist Party, and generally known that 
its policies and line of action are determined at meetings of the Third 
Communist International, or Comintern generally held in Moscow and 
dominated by men of Russian speech and Russian training, most of 
whom hold positions under the Government of the Soviets or are in 
daily and submissive contact with those who hold these positions. 
Matters of specific national policy, matters which affect the domestic 
organization of the United States, matters which affect our foreign 
relations, are the constant subjects of discussion and decision at these 
assemblies. The small minority of American delegates must accept the 



256 



STATE PAPERS AND PUBLIC ADDRESSES 



decision of these assemblies and must carry them out in their Com- 
munist Party activities in America. They must attempt to effectuate 
measures in the United States which are determined by the alien 
majority. They must select and support candidates whose personality 
and conduct are approved by this alien majority, witliout reference to 
the interests of the United States or even to the express dissent of the 
deleg:ates from the United States. 

Mr. Ear] Browder, Cliief Executive Officer and spokesman of the 
Communist Party of the United States, recently testified before a con- 
gressional committee that it is necessary for it to agree with the deci- 
sions of this alien organ izat ion, and he approved the following state- 
ment of line of authority which directs the activities of the Communist 
Party in California and elsewhere throughout the United States: 

"After a decision has been taken by the Congress of the Commu- 
nist International, by the congress of the respective sections, or bj^ lead- 
ing committees of tlie Comintern and of its various sections, these deci- 
sions must be unreservedly carried out even if a section of the party 
membership or of the local party organization are in disagreement 
with it." 

These facts seem to account for startling changes of attitude and 
strategy observed on the part of Communists traceable to changes in the 
foreign policies and pacts by and between foreign governments includ- 
ing Russia. 

With sound legal reasons the constitutionality of the procedural 
section of the bill may also be questioned by la^v^'ers, in that it commits 
the power to decide when a political party is qualified for the primary 
ballot to the Secretary of State and Attorney General, without provid- 
ing for a hearing before either of them. 

While their determination is subject to review by the courts, no 
record of facts or procedure for the courts to review is provided for. 

Nevertheless, as I have heretofore stated, it is the intent of the act 
to leave to judicial decisions the constitutionality of any of its provi- 
sions, and I could not veto the bill on tlie questionable constitutionality 
of any of its provisions, witJiout being misunderstood upon the subject 
and policy of the measure. The purpose of this brief statement is to 
make myself understood in signing my approval of this bill, which I 
am now doing. 

Thank you and good night. 



PUBLIC ADDRESSES AND RADIO TALKS— 1940 257 

THE COLORADO RIVER BASIN 

Radio address over California Broadcasting System, 
November 18, 1940 

My Fellow Citizens 

Last week I spent four days at Boulder Dam, meeting with the 
Governors and other official representatives of the seven states of the 
Colorado River Basin, officials of the United States Reclamation Bureau 
and members of the National Resources Planning Board, discussing our 
water and power problems and the manner in which the Colorado River 
system should be developed in order to best utilize its water and power 
resources and apply them to man's highest purposes. 

I wish all the people of California could see Boulder Dam, Lake 
Mead, and the massive electric generators from which California, and 
especially southern California, receives so large a share of her electric 
power. It is not merely because of their spectacular scenic worth, but 
because a better conception of their importance to the life and well- 
being of our State and the great southwest is gained by such a visit. It 
awakens a realization that water and power are bloodstreams and nerve 
centers of the industrial and economic life of our great western empire. 

Most of California's agriculture is dependent upon irrigation for 
its water supply. The great metropolitan area of Los Angeles is 
dependent upon large and regular flows of water from other areas far 
distant. The future growth of California's agriculture, of our indus- 
tries, and our population is dependent upon our ability to capture, 
conserve and utilize all of our water resources. In view of this depend- 
ence, it seems to me that a knowledge and understanding of our water 
and power problems, and their intimate relation to the general economic 
problem, are almost entitled to be deemed a "requirement of citizen- 
.ship." 

Many people take it for granted that there is and always will be 
plenty of water. But engineers and scientists know better. They know, 
all too well, that much of California, in its natural state, is a desert or 
a semidesert, as is much of the other states of the Colorado River Basin. 
They know that the supplies of water available to make this desert 
bloom are strictly limited. And they know that the demands of Cali- 
fornia's prolific agriculture, expanding industries and increasing pop- 
ulation are very rapidly approaching the limits set by these resources. 

Problems thus presented were discussed at these conferences at 
Boulder City in the light of facts presented by engineers and technicians. 
T am, therefore, prompted to talk this evening about the Colorado River, 
Boulder Dam, and electric power— and their meaning to the people of 
California. 

Most of our country's great rivers have been attractive and easy 
routes for travel, interior exploration and development. Most of them 
have figured prominently in the opening and settlement of the country. 
But that is not so of the Colorado River, because of its deep canyons 
and dangerous rapids and the roughness of much of the territory 



258 



STATE PAPERS AND PUBLIC ADDRESSES 



throug:h which it flows. Its development befran in very recent years, 
with the needs of the growing populations of the great southwest for 
more water and power, and the suffering of certain sections from lack 
of flood controls. 

The capture of the waters of the Colorado River for flood control, 
water conservation, and power generation was planned for decades by 
forward-looking, progressive citizens, before action was finally accom- 
plished. Such plans were delayed by the opposition of privately owned 
power interests asserting that there would never be a market for the 
power developed at Boulder Dam, and by delays met with in reaching 
an agreement among the seven Colorado River Basin states as to the 
division of its waters. Finally, in 1922, after many years of negotia- 
tion, the Colorado River Compact was framed. Within the next very 
few years it was signed by six of the seven basin states and, in 1928, 
that compact was confirmed by Congress. This was the 47th Interstate 
Compact adopted under the United States Constitution and the first 
one to apportion interstate waters. This compact gives a little less 
than half of the low average flow of the river (as measured at Lee's 
Ferry) to the four states in the upper basin (Wyoming, Utah, Colorado 
and New ]\Iexico) : and a little more than half to the three states in 
the lower basin (Nevada, Arizona and California). 

With the compact in effect, the Congress soon acted to authorize, 
finance and undertake the construction of Boulder Dam, the Ail- 
American Canal and other lower basin pro.iects. Most of the under- 
takings originally projected are now completed with great and very 
tangible benefits flowing to the people of California and with the 
promise of even greater benefits presently to come. 

The Boulder Dam made Lake Mead, with a storage capacity of 
thirty million acre-feet of water. 

The Imperial Dam, supplying water to the All-American Canal in 
Imperial and Riverside counties is capable of diverting as much as 
15,000 cubic feet of water per second, a part of which flows to the 
Yuma Project, a part for Mexico and a part, eventually, for San Diego. 
But the major share will be carried by the All-American Canal to irri- 
gate a million acres of Imperial Valley and Coachella Valley lands; a 
flow of about 10.000 cubic feet per second, which is some eight or ten 
times the summer flow of the Sacramento River. 

Heretofore, the Imperial Valley has always depended upon the 
uncertain summer flow of the Colorado River which, in some dry years, 
has run so low that there was not enough to irrigate lands under culti- 
vation although during hea\y rainfall seasons in the upper basins the 
people of this valley were threatened and at times suffered loss of life 
and property from uncontrolled flood waters. With flow now suscep- 
tible of regulation by Boulder Dam, an ample supply is assured and 
thousands of acres of new lands will be brought under cultivation, with 
corresponding enrichment of our entire community. 

Still another great benefit is now by way of final realization in the 
new supply of Colorado River water for the cities in the Metropolitan 
District. A storage and power dam has been built at Parker, from 
which the Metropolitan Water District, representing the City of Los 
Angeles and nearby cities, will take up to 1,.500 cubic feet of water per 
second, lift it 1,600 feet over the mountains by means of powerful 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



259 



electric pumps, and brinj? it to Los Angeles and many other cities in 
the Los Angeles basin; thus assuring them a water supply for many 
years of future growth. 

This diversion is already under way. For several weeks water has 
been pouring into the reservoir formed by the building of Cajaleo Dam 
near Riverside. Only day before yesterday ceremonies were held at 
this reservoir naming it Lake Matthews in honor of Mr. W. B. Matthews, 
for many years legal counsel for Los Angeles and the Metropolitan 
Water District, and one of the "fathers" of that district organization. 

By the middle of next year this water will be in actual use in Los 
Angeles and vicinity. 

And let us consider the matter of electric power from the Colorado 
River. 

The people of Los Angeles, Burbank, Pasadena, Glendale and 
vicinity have for some time been using cheap power from Boulder Dam 
distributed through publicly o^^^^ed distribution systems. Dynamos 
generating about 900,000 horsepower are now installed at the dam and 
in operation. Eventually that total capacity will be doubled. 

The municipally owned Los Angeles Bureau of Power and T^ight 
operates the dynamos generating about two-thirds of the present 
output; this being the power flowing to public agencies, such as the 
Metropolitan "Water District, and the municipally owned electric distri- 
bution plants of Los Angeles. Burbank, Pasadena and Glendale. The 
other third of the present output is generated by dynamos operated by 
private agencies. 

Los Angeles city is using about 80 per cent of the two-thirds of 
this power moving to public agencies; accounting for about 60 per cent 
of all power used in Los Angeles. Thus, Los Angeles is using more 
than half of all power now generating at Boulder Dam. It is this great 
market for power that, in reality, underwrote and guaranteed the suc- 
cess of the Boulder Dam Project, and which will eventually repay the 
Government's investment with interest now reduced to 3 per cent. 

The present wholesale electric rates were fixed by contracts entered 
into in 1930, before the dam was built. They were based upon a 4 per 
cent interest rate. Since then, technological improvements have cheap- 
ened operation costs, and interest rates have declined. Therefore, about 
two years ago, a committee of sixteen representatives of the seven basin 
states asked the Government to readjust the rates. As a happy result 
of their work, the Congress passed, and on last July 19th, the President 
signed the Boulder Canyon Project Adjustment Act, whereunder new 
rates are to be set, based upon repaying to the Government the cost of 
the Dam over a period of fifty years at an interest rate of only 3 
per cent. 

It is anticipated that the new low rates of interest have been set 
and in effect in about six months from now. Present estimates are that 
they will be as low as 1.1 mill per kilowatt hour of electric energy. 
This will mean a cost of about 3 mills delivered in Los Angeles for 
distribution ; a very low and a most attractive rate to industries using 
power. 

Two more large generators are now being installed at the dam, 
and a third is on order. The remainder will be built as fast as condi- 
tions warrant. However, Los Angeles and southern California may not 



260 



STATE PAPERS AND PUBLIC ADDRESSES 



buy all of this power since Arizojia and Nevada are entitled to take a 
generous share. It is, therefore, now foreseen that IjOS Anjreles will 
have soon to build lar<re steam g'eneratinp: plants in order to keep up 
with the rapid prro^v•th of population and the even more rapid expansion 
of industry in the Los Angreles area. 

Then, of course, there are numerous additional sites alonjr the Colo- 
rado River, above Boulder Dam, where dams can and eventually will be 
constructed and dynamos installed capable of •reneratine: hundreds of 
thousands of horse power. There still remain to be decided many ques- 
tions relatintr to the development of the Colorado "River and the disposal 
of its waters and electric power. For example, the three lower basin 
states, by the terms of the compact, have a certain share of the river's 
estimated annual flow. But the State of Arizona has not yet siqrned the 
compact. No settlement has been reached deciding how this water shall 
be divided ; how much to Arizona, how much to Nevada, and how much 
to California. Another question not yet answered is that of "how much 
Avater must be left in the river to flow across the international boundary 
into the delta country in Mexico?" Mexico claims a large supply for 
the hundreds of thousands of acres already under cultivation in this 
rich section. This question can be settled only by treaty with our Fed- 
eral Government. Tt is a question of the utmost importance to Califor- 
nia because it sets another limitation upon the amount of water we may 
take from the river. Still another question is that of additional dams 
and power deA-elopments. Already, Arizona is applying for permi.ssion 
to build another high dam at Bridge Canyon, just a few miles above 
Ijake Mead with the expressed intent of going into the wholesale electric 
power business. Inasmuch as engineers agree that these power develop- 
ments and their operation should be carefully integrated so as to assure 
maximum efficiency ; inasmuch as, in all probability, it will devolve 
upon the Federal Government to finance the project, it is my belief 
that the Bridge Canyon Dam as well as all other dams and power 
developments along the river, should be undertaken and carried through 
under federal leader.ship, control and operation. 

I have barely sketched the enormous benefits already conferred 
upon California and the southwest by these initial efforts to harness and 
control the mighty Colorado. These efforts first found lodging only in 
men's minds. Now they find realization out of the plans made by 
engineers and other practical men, out of the application of science, 
machinery and power, o\it of the sweat and labor of thousands of men. 

The water and the power only now made available after literally 
decades of advocacy, planning and political effort are a potent and 
indispensable factor, not only in the spectacular industrial growth of 
California, but also in the magnificent contribution California is now 
making to the building of our national defense. A study of the Colo- 
rado River development sliows the necessity to plan still further great 
public ownership developments if the needs of our continuously grow- 
ing population and future generations are to be .supplied with water 
and power. Meantime, at this Thanksgiving sea.son, we should inchide 
thanks for Colorado River and the application of its resources so far 
accomplished. 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



261 



PARENT-TEACHERS' ASSOCIATION 

Address before District 3, Parent-Teachers' Associatioti, broadcast over Columbia 
Broadcasting System, Thanksgiving Day, November 21, 1940 

My Fellow Citizens 

I am grateful to Mrs. Alexander and the members of the Parent 
Teachers Association of the Third California District for this oppor- 
tunity to speak to you on this observance of Thanksg'iving Day. 

It is fitting that the Parent-Teachers' Association take part in this 
observance of Thanksgiving because this organization of parents and 
teachers is more immediately and actively devoted to the welfare, edu- 
cation and training of the children of America than any other like 
organization. The Parent-Teachers' Association has a three-fold pur- 
pose : to know the child through study and parent education ; to 
cooperate with the schools and other educational agencies in child 
training by sharing participation with teachers and educators; to con- 
trol and build proper environment through the development of public 
opinion and civic activity. 

The Parent-Teachers' Association brings together in one organiza- 
tion those parents, teachers, and other adults who are in essential 
agreement as to the importance to society of all that concerns children 
and youth and are interested in developing activities based upon these 
beliefs. The scope of this endeavor also includes work it? connection 
with all phases of education from the earliest experience in the home 
and nursery throughout the elementary school, the high school and the 
college. It includes activities in the fields of parent education and 
adult education. 

In urban centers the contribution of parent-teachers work is fre- 
quently evidenced on behalf of children and youth ; in rural areas the 
service of the Association is on the basis of those changing social and 
educational needs of adults as well as of children and youth which are 
indicated in the life of the open country. 

The Parent-Teachers' Association becomes increasingly valuable 
to the community as it develops new methods and procedures respond- 
ing to the changing social and educational needs of our times. The 
Association is not a charity but a cooperative, nonpolitieal, nonsec- 
tarian, noncommercial effort to produce American citizens who shall 
be strong in body, alert in m.ind and sound in character, capable of 
performing responsibilities of American citizenship. 

On this Thanksgiving Day, November 21, 1940, the parents of 
America have much to be thankful for, thankful that American parents 
and their children are not suffering the horrors of war; that American 
children can safely and happily attend the institutions of free educa- 
tion given them in the democracy of the greatest and strongest nation 
in the world. 

In paying tribute to the members of the Parent-Teachers' Associa- 
tion, it is appropriate to review briefly the history of Thanksgiving 
today in the United States of America. 



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STATE PAPERS AND PUBLIC ADDRESSES 



Thanksgiving holiday has its origin in the earliest days of our 
colonial history. The Puritan fathers sought this new world in search 
of freedom to worship God according to their ovm like. Here, they 
found it. Their first year was a bitter struggle for survival against 
fearful odds. Therefore, in 1621, three hundred nineteen years ago, 
after their first harvest. Governor Bradford set aside a day for Thanks- 
giving and prayer. The experiences of this first year have, to this 
very day, left their unmistakable stamp upon the American people, 
and they gave to Thanksgiving Day its very first and its very deepest 
meaning; namely, as a day of fervent thanks for freedom and for 
plenty. 

In his first year as President, General Washington, responsive to 
a request from both Houses of the Congress, that he : " * * * 
recommend to the people of the United States a day of public thanks- 
giving and prayer, to be observed by acknowledging with grateful 
hearts the many and signal favors of Almighty God, especially by 
affording them an opportunity peaceably to establish a form of govern- 
ment for their peace and .safety, * * *" assigned Thursday, the 
twenty-sixth of November, 1789, "* * * to be devoted by the people 
to the service of that * ♦ * beneficent Author of all the good that 
was, that is, or that will be; that we may then all unite in rendering 
unto Him our sincere and humble thanks for his kind care and protec- 
tion of the people of this country previous to their becoming a nation ; 
for the * * * favorable * * * conclusion of the late war ; for the 
great degree of tranquillity, union and plenty which we have since 
enjoyed ; for the peaceable and rational manner in which we have been 
enabled to establish constitutions of government for our safety and 
happiness, and particularly the national one now lately instituted; 
for the civil and religious liberty with which we are blessed, and the 
means we have of acquiring and diffusing useful knowledge. * * * 
And that we may then unite in offering our prayers * * * to render 
our National Government a blessing to all the people by constantly 
being a government of wise, just and constitutional laws, discreetly and 
faithfully executed and obeyed ; to protect and guide all * * * nations 
* * * and to bless them with good government, peace and concord; 
(and) to promote the knowledge and practice of true religion and 
virtue and the increase of science * * *" 

Thus did the Father of our Country broaden the meaning of 
Thank-sgiving Daj^ to include thanks for the blessings of con.stitutional 
government, of a beneficent government watchful for the welfare of 
its citizens, and of civil liberty. President Madison set aside a day of 
Thanksgiving for the close of the "War of 1812, thus broadening still 
further its meaning, as a day of thanks for the blessings of peace. 
And Abraham Lincoln, in 1864, taking note of the augmentation of 

"* * * our free population by emancipation * * *" (which he 
considered a true blessing), set apart a day of thanksgiving, and he 
asked the people to "* * * offer up * * * prayers • * * for a return 
of the inestimable blessings of peace, union and harmony throughout 
the land * * • for ourselves and for our posterity throughout ail 
generations." 

Since then, in every year, the President of the United States has 
set apart a day of thanksgiving. 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



263 



This year we observe it with added fervor because events have 
conspired to make us more apprehensive and more thoughtful, and 
therefore more appreciative and more thankful than ever before, for 
our freedom and civil liberties, for our constitutional government, for 
our beneficently inclined government, for our national security, and 
for peace. 

This apprehension has forced us to review the events of the past 
generation ; events which have already culminated in two of the most 
awful wars man has ever known. Looking back we now realize that 
new forces have been at work within our bodies social, economic and 
politic; or, rather, old forces have been permitted to work without 
control, without proper regard for their harmful effects. And now 
we witness the consequent stresses and strains upon our institutions. 

The resolution of these forces has produced, elsewhere in the 
world, new, strange and antidemocratic philosophies of government; 
or, rather, new and strange restatements of old and reactionary phil- 
osophies which do violence to the democratic principles upon which 
those who passed this way before us founded our government, built 
our Nation and made us one people. 

The resulting debate has been healthy for us because it forced us 
to a critical reexamination of our democratic principles and to an even 
more critical reexamination of our institutions. I say "healthy" 
because I believe that America is gradually emerging from this period 
of self-examination and that out of it are coming national decision and 
determination. 

Decision that there is nothing wrong with our democratic prin- 
ciples. Decision that there is something seriously wrong with some of 
our institutions, such as, for example, hunger in the midst of plenty, 
dire poverty in the presence of great riclies, mass unemployment in the 
presence of work that needs doi)ig, monopoly practices and" exactions by 
men who preach competition and free oiterprise. Decision that the 
failure of institutions is the harmful result of our failure to keep the 
forces of greed and selfishness within due bounds. 

Determination to resolve these forces into new and constructive 
directions. Determination to eliminate those of our institutions which 
are bad or can no longer serve us well. Determination to reform or' 
rebuild those institutions which stand in need of repair. And determi- 
nation, above all, to defend, maintain, and continue the practice and 
expansion of our democratic principles. 

And this self-examination is healthy for still another reason. It 
brings to mind all the more sharply, it brings home to us all the more 
forceably the things for which, and the reasons why we should and do 
have a very real feeling of thankfulness for the blessings that befall 
us in America. 

We give thanks for the resources and the fruits of nature with 
which our land is so richly endowed. AVe pray only for the wisdom to 
guide their conservation and utilization to best serve man's present and 
future needs. "We are grateful for a strong and a beneficent govern- 
ment and for the sound democratic principles upon which it is so well 
founded, and to the maintenance of which that government is so firmly 
committed. 



264 



STATE PAPERS AND PUBLIC ADDRESSES 



We are grateful for the wide oceans which form so effective a 
barrier to armed invasion of our shores. We are grateful for the 
friendly relations prevailing between and among the governments and 
the peoples of the western hemisphere. 

We view with alarm and compassion the awful scene of carnage 
in Europe and Asia, and we realize, to our dismay, that it is only in a 
rather technical sense that our government remains at peace. But we 
are grateful for the fact, above all else, that we are not directly involved. 
We pray only for the wisdom and the providential guidance that will 
continue to hold us safe and unharmed. Right now, we are in one of 
the most awful moments, one of the most critical moments of man's long 
history. 

We are, therefore, most fervently thankful for the unity of purpose 
which has become so manifest among all citizens throughout the length 
and breadth of our land ; the purpose to defend our people, our shores 
and our government against anj- possible invasion from without ; the 
purpose to defend and maintain our democratic principles and all that 
is good in our institutions; the purpose to so reform and rebuild that 
we shall at once draw closer to our hearts all that is worth defending 
and, at the same time, make ourselves proof against all attacks, disinte- 
gration and deterioration, both ph5^sical and mental, whether from 
without or from within ; the purpose to remain at peace ; and the pur- 
pose to implement all of these other purposes by so building, outfitting 
and organizing our military might that we shall stand as a rock of 
strength and peace for our own, and as a symbol of hope for all 
mankind. 

Seventy-seven years ago, in another period of deep crisis, Abraham 
Lincoln issued a Thanksgiving Proclamation in which he said, in part : 
"Needful diversions of wealth and strength from the fields of peaceful 
industry to the national defense have not arrested the plow, the shuttle 
or the ship; the axe has enlarged the borders of our settlements, and 
the mines, as well as iron and coal, as of the precious metals have 
yielded even more abundantly than heretofore. Population has steadily 
increased notwithstanding the waste that has been made in the camps, 
the seige, and the battlefield; and this country, rejoicing in the con- 
sciousness of augmented strength and vigor, is permitted to expect con- 
tinuance of years with large increase of freedom. No human council 
hath devised, nor hath any mortal hand worked out these great things. 
They are the greatest gift of the most high God * * *. It has 
seemed to me fit and proper that they should be solemnly, reverently, 
and gratefully acknowledged as with one heart and one voice by the 
whole American people." 

We of the Western States have a big stake in all of these things 
for which we are today so grateful. It is a stake in which we find ample 
reason for unity with the rest of the Nation ; ample reason for coopera- 
tion with our sister states and with the Federal Government. In this 
hour of crisis we pledge that unity and that cooperation to the national 
defense, sensitive of the very special contribution it is our responsibility 
to make to that defense. It is the responsibility that grows out of our 
Western pioneer tradition which we so proudly retain. Pioneers are 
not afraid of the future. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 940 



265 



Lastly, let us be compassionate for the suffering victims of war 
and deeply mindful of our Christian responsibilities to those in our 
own land who suffer the pains and distress of sickness, poverty and 
insecurity. They, too, are entitled to the heritage that lies in the 
promise of American life. 

I thank you. 



18—18527 



266 



STATE PAPERS AND PUBLIC ADDRESSES 



THE CENTRAL VALLEY PROJECT 

Radio address over California Broadcasting System, 
December 26, 1940 



My Fdlotv Citizens 

I was absent from the State duriiii^ the two weeks from Sunday, 
December 8th, until last Sunday, on a trip to the National Capital. 
I spent a week there. I talked with many <rovernment officials about 
many matters of vital interest to California. But the principal object 
of my visit was to talk with President Roosevelt, and others, about the 
further development of the Great Central Valley Project. 

Most Californians know, at least vaguely, that the valleys of the 
San Joaquin and Sacramento rivers are rich and fertile, but fall far 
short of their maximum capabilities because throufjliout vast areas of 
these valleys there is a shorta<re of water. Most Californians know, 
vaguely, that hundreds of farms, comprising thousands of acres, have 
been abandoned and have reverted to desert because of water shortage 
and the prohibitive cost of electric power to pump water from wells. 
And most Californians know, vaguely, that the people voted — ^seven 
years ago — to authorize the State Government, through the so-called 
"Water Project Authority, to issue up to $170,000,000 in revenue bonds 
and to spend the proceeds for dams, canals, power plants, pumping 
plants, power lines, etc., in order to tame the waters of the Sacramento 
and San Joaquin river sy.stems and to conserve these waters and apply 
them to agriculture, industry and commerce. 

But only a very few people know much about the details of the 
Great Central Valley plan. Only a very few people could give a clear 
account of what dams are to be built, and where; how much electric 
power will be generated; how much water will be carried, and how 
far, and to how many thousands of acres of land now good only for 
dry farming. Only a very few know how the Central Valley Project, 
when completed, will reduce flood damages almost to zero, make the 
Sacramento Kiver readily navigable as far north as Chico Landing, 
perhaps as far as Red Bluff. Only a few people know how the Central 
Valley Project will stop the encroachments of salt water which, in 
recent years, have ruined thousands of acres of rich lands and caused 
more than $;50,000,000 of direct crop losses in the delta areas above 
San Francisco Bay. But still few people have anj- real conception of 
the enormous real benefits — benetits far average men and women — 
which can be made to flow from the Central Valley Project. 

For example, at Sha.sta Dam, north of Redding, the impounded 
waters will generate enormous quantities of electric power — cheap 
power. Cheap power, in that area, would make practical the develop- 
ment of chromium ores, known to exist but heretofore of little value 
because of high smelting costs. Another example. Cheap power and 
cheap water would make possible the establishment of straw board and 
insulating board plants to utilize the thousands of tons of straw and 
other farm by-products which now go to waste or, at best, bring only 
very low prices. 



PUBLIC ADDRESSES AND RADIO TALKS— I94O 



267 



Another example of benefits is found in the improvement of Sac- 
ramento River navigation to be made possible by the Central Valley 
Project. River boat freighting is the cheapest transi)ort known. Regu- 
lation of river flow at Shasta Dam will make possible the reestablish- 
ment of year-round river traffic, as far north as Chico Landing, and 
the lighter-draft boats will be able to go fifty-two miles further— to 
Red Blulf. To the farmers of Colusa, Sutter, Butte, Glenn, Yolo and 
Tehama counties, this will mean cheaper access to both domestic and 
world markets through San Francisco Bay; with a correspondingly 
improved chance to realize a profit from their crops. Along and near 
the Sacramento River there are to be found deposits of gravel, build- 
ing stone, limestone, clay, and otlier materials and ores, all of whicli, 
if they are to be exploited and marketed, are utterly dependent upon 
cheap transport. To the owners of these deposits, the reestablishment 
of river traffic will open the way to new industries and the general 
enlargement of employment. Bnsed upon an average saving of only 
fifty cents per ton, it is estimated that tlie reestablishment of river 
traffic on the Sacramento will at least double in the fifteen years fol- 
lowing completion of Shasta Dam, and save shippers over half a million 
dollars a year. Army engineers estimate that to reopen the river to 
Chico Landing without the regulation made possible by Shasta Dam, 
would cost at least seven and a half million dollars, and their works 
would be subject to all the hazards of flood damage with which we are 
today all too familiar. Still another example of the benefits possible 
from the Central Valley Project is found in the enlargement of recrea- 
tional facilities. The Shasta Reservoir, north of Redding, and the 
Friant Reservoir, north of Fresno, will, of course, be the largest in the 
system. But the whole plan, when completed, will include some twenty- 
two other reservoirs. All of them will be most inviting for recrea- 
tional purposes. Recreation is a "major industry" in manj^ sections 
of the country. We in California, especially, know what a valuable 
asset it is. There is every reason, therefore, to look forward to a very 
great expansion of all business dependent upon sportsmen and others 
seeking these artificial lakes for recreation. Building all of these dams, 
and changing the behavior pattern of these two great rivers will, of 
course, change the fish life. In some instances, it may cause actual- 
loss; as, for example, with the salmon, thousands of which migrate to 
the upper reaches of these rivers to spawn. But the new lakes, on 
the other hand, will become the habitat of other fishes and greatly 
enlarge the number of places where California sportsmen may go for 
good fishing. I could, easily enough, extend the list of benefits possible 
from the Central Valley Project ; but the points about it which need 
most to be brought to public attention now are these : 

1st. The Central Valley Project can be made to solve the entire 
water shortage, flood control and navigation problem of the great 
Central Valleys upon which the prosperity of the entire State depends. 

2d. The Central Valley Project can be utilized to expand and 
stabilize industries and (ireate an endless array of new enterprise — 
profitable enterprise— both public and private. 

8d. At present, fewer than one million people live in the Central 
Valleys. The Central Valley Project is the key to making these valleys 
provide homes and the good life for many millions. 



268 



STATE PAPERS AND PUBLIC ADDRESSES 



4th. But these benefits can not be expected to come out of the 
mere assertions that they are possible. 

5th. These benefits can eome only out of broad-visioned plans 
courageously executed. 

6th. We have basic plans but tliey are not going forward rapidly 
enough. Immediate action is needed by an executive authority clothed 
with all of the powers necessary to take over operation of the project 
from the production stage. It is now recognized that greater speed is 
necessary because of the contribution the Central Valley Project can 
make to the national defense. A shortage of electric power is now in 
view. We need tlie power presently to flow from tlie Shasta Dam 
dynamos. And, in order that this power shall accomplish the greatest 
good, it must be distributed to industries, farms and homes at the 
lowest possible rates, and this means public ownership. 

7th. The direct returns from the sale of water and power will 
pay off the entire investment, with interest, thus providing a substan- 
tial outlet for private investment. 

8th. But, in order to realize maximum benefits, we must reorganize 
our scheme for its execution and push it to completion with renewed 
vigor, and — 

9th. The time is now ripe to effect this reorganization. The 
project was first adopted as a State venture. But parts of it — the most 
essential parts ; that is, the financing and building of tlie main features 
of the project, have been taken over by the Federal Government. 
Instead of Avaiting for legislative action enabling the State to admin- 
ister the benefits of the project, and a determination of State and 
Federal functions in the distribution of its benefits, it would seem 
that the time has now come for the National Congress to adopt broad- 
gauge plans to apply to the planning, building and operation of the 
Central Valley Project the same ideas and policies that have remade 
and revitalized the seven states of the Tennessee Valley under the 
guidance of the TVA. 

While in Washington I discussed this proposal at length with 
President Roosevelt, in company with T.V.A. Director David E. 
Lilienthal. Both of them are closely familiar with our Central Valley 
problem. The President is stronglj- in favor of the creation of a 
Federal California Central Valley Authority, patterned after the 
Tennessee Valley Authority. A bill to establish such a regional 
authority, to be prepared with the collaboration of our State agencies, 
will be introduced iii the Congress at its coming regular session. By 
such a measure we can apply the strong central authoritj^ and financial 
aid of the Federal Government to the problems of the Central Valleys, 
but Avith the great advantage of having all plans made and executed 
right here on the ground — by men who know what it is all about. 

Life in California can continue to be a bitter struggle for mere 
subsistence for the great mass of people who live here. Or, with the 
help of such organization of human effort and cooperation as we see 
so successfully exemplified in the Tennessee Valley, it can be a life 
of security and comfort for far more people than live here now. 

I hope your Christmas was happy for your children, and as cheer- 
ful for you as unhappy world conditions permit to thoughtful people. 



PUBLIC ADDRESSES AND RADIO TALKS— 1940 



269 



My fervent prayer, for the coming year, is that it shall bring 
prosperity, increased personal security, national safety, and an end to 
the wars now raging. 

I thank you and bid yon good niglit. 



PUBLIC ADDRESSES AND 
RADIO TALKS 

o 

1941 



THE CENTRAL VALLEY PROJECT AND ITS 
RELATION TO TRANSPORTATION 

Excerpts from an address to the Pacific Transportation Association, 
Commercial Club, San Francisco, January 21, 1941, and 
broadcast by National Broadcasting Company 



One of the principal features of the California landscape, and 
one of the most important features, economically, is a jrreat trough 
or valley, lying between the Coast Range on the west and the Sierras 
on the east. This trough averages fifty miles in width and it is four 
hundred fifty miles long, stretching from the Tehachapi Mountains 
and Kern County on the south, to the headwaters of the Sacramento 
River above Redding in Shasta County. This long trough is known 
as the great Central Valley of California. The south half is drained 
by the San -Joaquin River which flows northerly. The north half is 
drained by the Sacramento River which flows southerly. The two 
rivers join between Stockton and Sacramento and flow together into 
San Francisco Bay. 

The Central Valley is already long famous for its agricultural 
productivity. Its soils are underlaid with rich deposits of gas and oil. 
The mountains flanking it are richly mineralized and clad with forests. 

California has a population of nearly seven million people. A mil- 
lion of them live in the Central Valley. At least three of the other six 
millions are directly, if not wholly, dependent, for their livings, upon 
the economic activity of financing, packing, processing, manufacturing, 
refining, selling, sacking, handling, and shipping, and eating and wear- 
ing and using the products of the Central Valley; or upon supplying 
the wants of the people living in the Central Valley. 

California's population has quadrupled in the forty years since 
the turn of the century. I regard as wholly conservative my belief 
that the population will again double by the end of the century, sixty 
years hence. If present trends continue, the increase will be accoiinted 
for, not by the natural excess of births over deaths within California,' 
but by immigration from without. And, if present trends of immigra- 
tion continue, the vast majority of immigrants will be farm families 
from east of the Rockies ; from those sections of the country where the 
excess of births over deaths is producing what might be termed an 
exportable surplus of population. 

Where are these immigrants going to settle down 1 What are they 
going to do for their livings'? 

The problem of assimilation here posed is scarcely comparable 
with the relatively simple problem of three, four, and five generations 
ago when millions of newcomers were moving into an unsettled, 
unclaimed, wilderness; conquering the west. For the most part, the 
seven million newcomers in the next sixty years are going to have to 
settle down by sandwiching them.selves in between and among us who 
are already here, legally entrenched and in possession. The experience 
of recent years, so dramatically portrayed by the Grapes of Wrath, 



[ 273 ] 



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STATE PAPERS AND PUBLIC ADDRESSES 



warns ns that there may be much friction in this process of sandwich- 
ing-in unless we plan for the future. 

This we have done. Many years ajro California had the foresight 
to set her on<rineers to planning for the future. From 1921 until 1931, 
the State Division of Water "Resources devoted ten years to intensive 
studies and invosti<;ations of our water and land problems. Out of 
these investigations the State "Water Plan was developed, which, in a 
report to President Roosevelt in 19.S4. was termed "the most carefully 
considered and complete plan of its kind ever drawn up." 

The plan calls for the control, storajre, redistribution and utilization 
of flood waters which now waste into the Pacific Ocean. The plan will 
provide ample water for every acre of irrip'able land on the floor of the 
entire Central Valley, control the floods, produce nearly six billion 
kilowatt hours of electric enerjry annually and perform numerous 
other services for the people. 

There are ten million acres of irriprable aprricultural land in the 
Central "Valley, "^^ith water, these acres are capable of supportin<? 
millions of people. But the water supply is unevenly distributed both 
g:eo<rraphically and seasonally. Two-thirds of the total rain and snow 
fall in the Central Valley drainajre basin occurs in the Sacramento 
River watershed containiu!? only one-third of these ten million acres; 
while that of the San Joaquin River Valley, containinpr two-thirds of 
the land, receives only one-third of the rain and snow. 

The State "Water Plan is a method for movinqr the rain waters 
from parts of the State havintr too much to those havinpr too little. 
It can not be carried out completely in a decade, or even in a genera- 
tion. It is a comprehensive plan covering? the entire State, and is 
subdivided into a number of units, each affecting a separate river basin 
of which the Central Valley consisting' of the watersheds of the Sacra- 
mento and San Joaquin rivers is one. This, the most important unit, 
since it affects by far the largest cultivable area in the State, is known 
as the Central "\^alley Project. It is now being constructed. It was 
designed to store flood waters and distribute them for irrigation. But 
to do this required the installation of a great dam at Shasta to impound 
four and one-half million acre feet of water, which is usable for many 
purposes. The Central Valley Project is one of man's boldest plans 
to overcome handicaps imposed by nature and to turn them to good 
account. 

The principal features of this project are : 

1. Shasta Dam — the second largest dam in the world — a great 
high concrete structure across the Sacramento River above 
Redding. 

2. A smaller dam, also a concrete structure, across the San Joa- 
quin River at Priant, twenty-one miles north of Fresno. 

3. A system of canals and pumping plants to divert water from the 
Sacramento River below the City of Sacramento and to carry it 
to the San Joaquin Valley country as far south as Mendota in 
Fresno County. 

4. Canals to carry water from Friant Reservoir southerly to the 
vicinity of Bakersfield and northerly to lands in Madera County. 



PUBLIC ADDRESSES AND RADIO TALKS— I 94 1 



275 



5. A great hydro-electrie power plant at Shasta Dam and a 200- 
mile transmission line to load center near Antioch. 

6. And probably a standby steam electric power plant, near 
Antioch. to "firm" the power from Shasta Dam. 

But the dams, canals, power plants, and pumping stations are not 
the final end and aim of the project. They are only the means to that 
end. The objective of the Central Valley Project, in broad terms, is 
the promotion of the general welfare. Careful engineering study, 
planning and execution are necessary to the building of those great 
works which form a sound physical base upon which we might build a 
well balanced and effective economy and social structure; but they are 
not that structure. 

That structure, and its success or failure, will depend upon and 
consist of the patterns of land tenure, the size of holdings, the manner 
of settlement, the patterns of farm operations and markets; upon 
rational labor relations; upon the pattern of industry; upon the cost 
of transportation to market; and, finally, it will depend upon the cost 
to consumers of the electric power to be produced by the project, and 
of water and other benefits promised. 

Let us canvass some of the benefits promised. Briefly, they are : 

1. Reduced flood damages in both the Sacramento and San Joa- 
quin Valleys. 

2. An assured supply of 3,677,000 acre-feet of water per season 
for irrigation of lands having rights to the use of Sacramento 
River water, or approximately 40 per cent more water than has 
been used by the lands in recent years. 

3. An assured supply of 3,472,000 acre-feet of water per season to 
meet the irrigation and salinity-control requirements of 400,000 
acres of rich land in the Sacramento-San Joaquin Delta. 

4. Provision of adequate water supplies for domestic, industrial 
and irrigation requirements of the area extending from the 
delta to Martinez which will be served by the Contra Costa 
Canal. 

5. Improved navigation on the Sacramento River to Red Bluff; 
a minimum depth of five feet to Chico Landing, and four feet 
to Red Bluff. 

6. Generation of approximately 1^ billion kilowatt hours of elec- 
tric energy annually. 

7. A variable supply of water, averaging 860,000 acre-feet per 
season, for lands in the northern San Joaquin Valley now using 
San Joaquin River water. Even in extremely dry years, this 
will exceed their present dry-year supply by more than 50 
per cent. 

8. A supplemental water supply for 1:^ million acres of developed 
farm lands in five southern San Joaquin Valley counties now 
in dire need of additional supplies. 

9. Restoration of underground waters which have been so heavily 
overdrawn in recent years in the southern San Joaquin Valley. 



276 



STATE PAPERS AND PUBLIC ADDRESSES 



10. Restoration to use of thovisancls of acres of good land in the 
southern San Joaquin Valley now abandoned for lack of water. 

Millions of acre-feet of water, millions of acres of land to be given 
water, and billions of kilowatts. In order to jrive these figures meaning, 
it becomes necessary to give them a liberal translation. 

For example, it means something to me when I am told that the 
Central Valley Project can readily be made to yield the good life for 
two, three, or four times the present population. It means something 
to me to be told that such increases, with corresponding increases in all 
lines of production and economic activity, including transportation, are 
the possibilities, the promise of the Central Valley Project. 

I am therefore glad indeed for this opportunity to talk about the 
Central Valley Project, to men actively engaged in the various branches 
of the transportation industry, because you are already familiar with 
the amazing number, variety, volume, tonnage, and value of the prod- 
ucts of the Central Valley. You know how they reach their markets. 
You know how they are gathered, pressed, processed, manufactured, 
packed, stored, transported and financed, and finally moved into con- 
sumption. 

Therefore, Avhen anyone describes the main features and the major 
benefits promised by the Central Valley Project, you are readily able 
to picture them in terms of your own industry, and grasp their 
enormous significance to the whole community. 

You know how vital it is to the welfare of the community that 
all of this economic activity be well served, in all its stages, with well 
organized transportation facilities, geared in cost, frequency and speed 
of service, to the nature of the commodities moved. 

You know the full meaning of again extending Sacramento River 
barge traffic one hundred ninety miles upstream from Sacramento 
to Red Bhilf. Years ago, this traffic was very heavy. But with the 
development of hydraulic mining, plugging the river channels with 
millions of tons of gravel and debris; and later, Avith the advent of the 
railroad, offering frequent, regular service and competitive rates; and 
with the heavy diversions of water from the river for irrigation, the 
summer flow of the river fell to such low levels that water traffic above 
Saci'amento was gradually choked off, almost to the vanishing point. 

Now, with the regular flow and navigable depths of water soon to 
be reestablished by controls at Shasta Dam, there is no sound reason, 
except rate schedules artifically maintained for the benefit of trucks 
and railroads, why river barge traffic should not again come into its 
own. My own view is that there should be no such discriminations 
against anj^ form of transportation. 

Army engineers estimate that the area tributary to the river above 
Sacramento should easily produce a million tons of river freight per 
year. Experts tell me there would be a saving of $1.25 a ton as against 
other forms of transport from this area to San Francisco. But even at 
a saving of only 50 cents a ton, the producers in the upper Sacramento 
River districts able to use river barge freighting service would realize 
savings which would enable them to repair their flood damages, pay 
their debts, and show profits. 

You know, also, what it will mean to the transjiortation industry 
serving the Central Valley if the population of the Central Valley be 



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doubled, trebled and quadrupled, and if, as a consequence, travel 
within the valley and travel in and out of the valley be doubled. You 
know, also, how it will stimulate your industry, and the packing, ware- 
housing, and marine terminal industries as well, if the volume, tonnage 
and value of the agricultural products of the Central Valley be 
doubled and trebled. You know, also, what it will mean to your indus- 
try if cheap power, cheap water, and cheap transport shall enable the 
establishment of scores, yes, hundreds of new industrial enterprises in 
the valley; converting agricultural wastes into usable commodities; 
exploiting clay, limestone and gravel deposits and other mineral 
deposits heretofore too remote or too low grade for profitable develop- 
ment ; smelting ores ; building homes and all of the facilities of an 
expanding economy. 

All of these things, and more, are the possibilities, the promise of 
the Central Valley Project. 

This promise, and the public character of the project were empha- 
sized, and its relationship to the whole economy of the people was con- 
firmed and clarified when they voted adoption of the Central Valley 
Project Act which contains the following declarations : 

"The people of the State of California * * * declare that 
the piiblic interest, welfare, convenience and necessity require 
the construction * * * of a system of Avorks for the conserva- 
tion, development, storage, distribution and utilization of 
water, with incidental generation, transmission, and distri- 
bution of electrical energy, which system of works is hereby 
designated as the Central Valley Project and is hereby spe- 
cifically approved and authorized." 

The act further declares : 

"The construction, operation and maintenance of said 
Central Valley Project, as herein provided for, is hereby 
declared to be in all respects for the welfare and benefit of the 
people of the State, for the improvement of their prosperity 
and their living conditions, and this act shall therefore be 
liberally construed to effectuate the purposes and objectives 
thereof. The (Water Project) Authority and the Department 
(of Public Works) shall be performing a governmental func- 
tion in carrying out the provisions of this act. ' ' 

But we all know that very often there is a whole world of differ- 
ence between promise and realization. We all know perfectly well 
that the success of any enterprise, once conceived, whether public or 
private, depends less upon careful plans than upon competent manage- 
ment. In other words, I conceive that it would be perfectly possible, 
with incompetent management, for the Central Valley Project to be 
built and placed into operation without our ever realizing its full 
promise ; without our ever realizing more than a very slight stimulation 
to population growth and economic activity ; without our ever realizing 
more than a very slight rise in the standard of living for the masses of 
citizens living in the valley. 

Therefore, at this stage of development of the project, T am more 
concerned with what shall be done with it and how, than with its broad 
physical features and potentialities. 



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I am thoroughly satisfied with the construction designs thus far 
submitted by the engineers. They have been checked and double 
checked by other engineers and found to be feasible; not only techni- 
cally feasible but economically feasible as well. In other words, if 
bonds were to be issiied to finance its cost, they would be a businesslike, 
sound investment. 

I am convinced that in the last analysis the success of the Central 
Valley Project will depend xipon the policies governing its operation; 
upon its careful and complete integration into the social and economic 
life of the people ; upon the hard common sense and sound social 
attitudes, the courage and determination of those who will be charged 
with its operation ; upon their having authority to act when action is 
necessary ; and upon the wisdom of their actions. 

I have some fairly definite ideas about how the Central Valley 
Project should be handled from now on. They are not as well kno^vn 
as I should like. Therefore, I wish to discuss them briefly. 

But first, let me say something about the present state of the 
project. 

The cost was first estimated at about 170 million dollars and in 
the Central Valley Project Act, approved in 1933 by the people, the 
State was to undertake construction in its entirety. But hard times 
intervened and nothing was done. So. finally, acting in response to 
the general welfare clause of the United States Constitution, President 
Roosevelt made the first funds available for the project under the 
National Industrial Recovery Act. This was in 1935. 

Since then the Federal Government has undertaken to construct 
all of the main features of the project. Seventy-three million two hun- 
dred thousaTid dollars have been allocated already, and the President's 
Budget contains an item of .$25, 000, 000 more for the coming year. In 
order to speed up the completion of Shasta Dam to make its hydroelec- 
tric power available as early as 1*)-13 to meet increased requirements for 
national defense, we are asking that this appropriation be doubled. 
Shasta and Friant Dams are now under construction. The Sacramento 
River will soon be under control, and the Shasta dynamos should be 
ready to deliver electric power Avithin tliree years. This work is being 
done by and under the direction of the United States Bureau of Recla- 
mation, a division of the United States Department of the Interior. 

For the present, this arrangement is highly satisfactory. But we 
shall presently encounter ditficulties. 

For example, th(* project is going to cause serious damage to fish 
life, especially to the salmon, unless strenuous and fairly costly meas- 
ures are taken to prevent. Our Fish and Game Division has made and 
is making exhaustive studies with a view to meeting these problems, but 
finds itself unable to make specific recommendations or to act effectively. 
This is partly because the Reclamation Bureau has not yet decided just 
how Shasta Dam water flow is to be operated, just how the salmon 
spawning runs are to be diverted when the salmon are no longer able 
to travel up the river to their usual spawning grounds. Nor is it 
decided whetlier the Federal Reclamation Bureau or the State Division 
of Fish and Game shall conduct and supervise the propagation of new 
fish life in the Shasta reservoir. Moreover, in coming to these decisions, 
still other Federal agencies will have to be consulted, and their 



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approvals obtained. I express the hope that plans and works to meet 
the fish problems introduced by the project can be formulated in time 
to prevent serious losses. 

Another example is found in the new navigation and flood control 
problems to be encountered. Heretofore our State agencies have had 
to work with but a single Federal agency, the War Department, in 
handling these problems. Now, another and additional agency must be 
reckoned with, the Reclamation Bureau, which will regulate river flow 
at Shasta Dam. I express the hope that tlie War Department and the 
Reclamation Bureau can and will cooperate effectively and without loss 
of time ; and these two with our State agencies. 

Another example is seen in the problems of the people in dealing 
with the governmental agencies. As.suming that the coordinated work 
of other agencies efficiently accomplishes direct and tangible benefits 
from the project in the form of flood protection, bigger and cheaper 
water supplies and cheaper electric power, the people still have to deal 
with numerous other Federal agencies in matters of credit, markets, 
crop benefits, and soil erosion control and so forth. How much better 
off they would be if all of their dealings with the Federal Government 
could be negotiated and conducted with a single government agency, 
itself concerned solely with the development of this one region and all 
of its parts, keeping each in its proper relationship to the others. 

Still another difficulty is encountered in the fact that the main 
offices of practically all of the Federal agencies are located in Washing- 
ton, D. C. All major decisions are made three thousand miles away 
from the job. Complaints so often heard about the slowness of gov- 
ernmental action, are largely due to this fact. 

Nevertheless, let it be remembered that the exercise of the Federal 
Government's broad, centralized powers is absolutely indispensable to 
the completion of the project, to its successful operation and manage- 
ment, to the development of all of its potential benefits, all in proper 
balance, and to making these benefits available to all of the people. 
The Federal Government has all of the authority as well as the strong 
financial power required to go through with the job. It has all of the 
power and authority needed to deal with all of the many groups within 
society whose interest impinge upon, some of them conflicting with, the 
objectives of the Central Valley Project. No additional Federal powers 
are needed. 

But close examination reveals still another major cause of slowness 
of governmental action. It results, not from the centralization of power 
in the Federal Government, but from the overcentralization of the 
administration of that power. Government is thus made too remote 
from the people. With powers of decision and administration seated 
3,000 miles away and there dispersed among scores of different agencies 
and bureaus, each intent upon its own job, it becomes very difficult, 
almost impossible, to integrate their functions, to mobilize them, and to 
bring them to bear, fully balanced, upon the problems of any given 
region. Nevertheless, this is exactly what we must do in order to 
squeeze out of these bureaus the full benefits and efficient services 
which they are capable of giving. 

What, then, should be done? 



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I firmly believe that in order to bring our Federal Government 
closer to the people, in order, specifically, to apply the full benefit of 
Federal authority and finance to the orderly, balanced, rational develop- 
ment of the great Central Valley ai*eas, we siiould have a Federal 
Regional Authority with its main offices in the heart of the Central 
Valley region, fully financed, fully authorized, and charged with the 
responsibility of opei'ating the Central Valley Project and stimulating 
and protecting economic opportunity throughout the region. 

1 do not refer to opportunity for a small number of already power- 
ful business institutions to add to their strength. I refer, rather, to eco- 
nomic opportunity, economic liberty, for the average man ; for men 
rather than institutions. I refer to economic opportunity for that 
major portion of our population whose economic freedom is so insecure, 
threatened as it is, by the steady growth of monopoly and concentration 
of wealth and power. 

Just how would such an authority work with the people? Let us 
suggest a few waj's. 

First, of course, by completing the system of works which we call 
the Central Valley Project. 

Second, by establishing the lowest possible prices for irrigation 
water supplies. 

Third, by establishing and securing adoption of mass-consvunption 
price policies for the distribution of electric power at the lowest possible 
costs to its consumers. 

Fourth, by promoting programs to fortify and rebuild the soil, by 
methods which Avill stimulate and strengthen the private enterprise of 
farming. It is upon the soil that our hopes for a rising standard of 
living depend. 

Fifth, hy carrying on scientific and technical research, and by 
building and operating pilot plants in order to develop new industrial 
processes and machinery. By making such findings available to the 
public; by interpreting the facts about the region's resources and 
potentials and needs; in order to stimulate the initiation and growth 
of private enterprise. 

Sixth, by the regional integration of agencies, both public and 
private, both Federal and State, upon which future economic growth 
depend. 

• • • * 

Now, to summarize. 

The Federal Government is building a vast system of works in the 
Central Valley of California. 

These works can accomplish great good for the entire region and 
serve the general welfare of the people if a thorough job is done with 
an eye single to the general welfare. 

This means stimulating economic opportunity for the greatest 
possible number of people. 

It is reasonably certain that under almost any plan of operating 
the project it will give rise to increases in population and economic 
activity in the Central Valley. But if the job is thorough; if it is 
planned and performed under a Regional Authority, located and 



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empowered to make decisions and establish policies right on the ground, 
we should see two, three, four, or five millions of people living here, in 
security and comfort. Agricultural and industrial output, and general 
economic activity should rise 200, 300, even 400 per cent. 

All this has meaning to you who are engaged in the transportation 
industry. 

You who are interested in transportation naturally want to see 
passenger travel and freight tonnage moving within the Central Valley 
or going into or out of the valley, rise by more than a mere 25 per cent 
or 50 per cent. You want to see these figures rise by 100 per cent or 
200 per cent. 

The difference is one of attitude. It is a difference between a 
neglectful attitude and a determined, intelligent, constructive attitude 
toward the future of our great Central Valley and the people who are 
to live there. 

To achieve maximum benefits entails support of a bill soon to be 
introduced in Congress to establish a Federal Regional Authority for 
the development of California's Central Valley. 

I ask you to support its adoption. 



19—18527 



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STATE PAPERS AND PUBLIC ADDRESSES 



GOALS OF DEMOCRACY 

Remarks made at the California Conference of Social Workers, 
Senator Hotel, Sacramento, February 1 , 1 941 

Ladies and Gentlemen 

It seems to me that the one great comprehensive goal of democracy 
which is all inclusive is the achievement of social justice. One of the 
truly great philosophers of our clay once wrote that "the beginning and 
end of morality, or ethics, or peace in family, tribe, or nation, is social 
justice. Social justice is the final test of civilization, the enduring 
foundation of all progressive civilization. It means nothing less than 
altruistic behavior of the type which had biologic value when the human 
race was a family, which has value today, and will as long as man is 
human, and not a mere animal who would tyrannize over his fellow men 
for sheer love of power or of self. " 

We take pride in the fact that our American democracy has made 
great advancements toward that goal, that it represents a net gain in 
civilization, but I believe all will agree that we are still a long way from 
the goal of social justice and that it will not be suddenly reached; that 
it will ultimately be realized only through further bitter experiences, 
gradual transitions and evolutions in collective thinking and collective 
action throughout generations to come. The steps toward it will 
embrace movements and measures forced by exigencies and acute con- 
ditions. That has been civilization's past experience. Movements 
toward social justice grow out of protests against the existing order 
which are born of suffering from social injustices that still remain after 
particular advancements have been made. 

It seems wholly likely that the early Christian hopes for social jus- 
tice never went beyond the hope for permission to practice their religion. 

Pope Urban, the II, set in motion a series of crusades which lasted 
through several generations, during which the emotions of millions of 
men were centered upon christianizing the Holy Land. That was their 
idea of social justice. 

And .so on down through the pages of history. At one time and 
another social justice has had its connotations of freedom of religion, 
freedom of speech, freedom of press, freedom to the private ownership 
of land and property; no taxation without representation; the right 
to vote, the right to assemble ; freedom from slavery. 

Within my own memory, efforts to destroy private monopolies and 
their fictitious price-fixing practices have been made ; monetary reforms, 
and the freedom of workmen to associate themselves in labor unions, 
with the right to strike for betterment of their conditions and a decent 
wage scale, have been made in the cause of social justice. 

Considerations of social justice have required the regulation of 
privately owned railroads and other utilities; safety regulations in 
industry; and interference with or intervention in many trades and 
professions to prevent unfair practices. Social ju.stice has come to 
mean the right of workers to bargain collectively; the right to work; 
job security; old age security. Never in all liistorv has there been so 
vast a literature of protest against insecurity; against poverty, want 
and even hunger in the midst of plenty. 



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What will social justice mean in the future? 

Ten 3'ears ago a great American philanthropist declared that 
within thirty years; that is, by 1961, the United States would see the 
end of dire poverty, disease and unnecessary sufferin<?. 

We could. But will we? 

I too am hopeful, but not so optimistic. We must take account 
of the horrible injuries society is now sustaining and the even more 
horrible injuries in prospect. And we must take into account the fact 
that while a democracy, the American way, frovernment by consent of 
the governed, decisions by a majority of free citizens, is fundamentally 
and eternally the best and most righteous system of government in the 
world, its processes are slow and its accomplishments are too often 
impeded b.y prejudice, false propaganda, selfish group interests, and 
lack of intelligent understanding of issues by the electorate. There- 
fore, I must admit that in 1961 we may still see poverty and altogether 
too much suffering. 

Poverty is a disease, of course, a social disease, as is crime. 
Poverty is a deficiency disease. It is a combination deficiency of vita- 
mins, deficiency of socially useful habits, deficiency of the wherewithal 
to pay for clothing, food and shelter. 

We have made great progress in coming to imderstand these dis- 
eases individualh^ Understanding is the beginning of wisdom, but 
only if we use that wisdom. 

Without attempting to canvas the entire list, I should say that our 
gropings, our searching, our crusading for social justice in the years 
ahead must include some very practical measures to stamp out these 
deficiency diseases and make the American people a healthy people ; to 
secure a greatly enlarged national income and a rational distribution 
of that income; to put a stop to the layhig waste of our rich heritage 
of natural resources, the soil, the forests, the oil and minerals and the 
waters, and planning for their utmost beneficial use by this and future 
generations. 

I should say that social justice must include the rationalization of 
our huge industrial monopolies and aggregations of wealth in order to 
secure to the people the great benefits which really are the potential,, 
the promise of monopoly and wealth, instead of the exploitation so 
commonly practiced. 

You who are engaged in social welfare work are engaged for the 
most part in a work of alleviation of poverty and social diseases, not 
in the removal of their causes. However, the social minded attitude 
which your work instills enables you to learn the causes and contribute 
to their removal. You come to realize that the basic cause is the 
animal instinct of selfishness and greed. An economy and philosophy 
of government prompted by that instinct is a false philosophy from 
the standpoint of social justice. A system of economy and policies of 
government not based upon rewards for service to society, but upon 
rewards for the most successful exercise of the instinct of human 
selfishness, greed and power to exploit the lives of others will never 
lead us to the goal of democracy — to social justice. Great battles in 
the political and in the industrial field will continue on to remove the 
causes of poverty and social injustice in civilization's travail for the 
goals of democracy. 

I thank you. 



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STATE PAPERS AND PUBLIC ADDRESSES 



TRIBUTE TO GREECE 

Remarks made as part of Nation-joidc broadcast on program "America Calling," 

February 8, 1941 

Fellow Americans 

The whole world owes so much to Greece for her contributions to 
culture. The whole west joins in grateful tribute to the Greeks. They 
have made over "the glory that was Greece" into the flaming slogan 
of democracy, "The glory that is Greece." Smaller in area than our 
State of Alabama; smaller in population than New York City; tiny 
Greece has won for democracy her first victories in this war, and has 
thus become the very symbol of hope for free peoples everywhere. We 
are thus inspired and determined to preserve our great heritage from 
the Greeks, that greatest of our social inventions, to which all Americans 
are dedicated, and which we call democracj'. 

Twenty-five hundred years ago they saved the civilization of that 
day from the vast hoi'des of the Hitler of tliat day, the Persian Xerxes. 
Their ambassadors refused to prostrate themselves before him and cry, 
"Heil Xerxes!" Instead \\\ex declared that "We were never taught 
to adore a man." 

When a Persian prince pointed to his wealth and luxury and 
advised them to yield, tliej' answered, "You have never known how 
sweet a thing is liberty or you would have urged us to sacrifice every- 
thing to preserve it. ' ' 

Today, again, the Greeks are sacrificing everything to preserve 
liberty. Not only for themselves but for the whole world. We can, 
without sacrificing anything, support their supreme efforts in these 
dark hours. Now is the time of their desperate need of that which we 
can give — dollars. Dollars are blankets — dollars are bandages and 
dollars are medicine — dollars are deliverance from despair. In the 
snow of tlieir mountain passes thej- are shedding their blood. Surely 
we can not refuse to shed a few dollars for aid to the heroic Greeks. 



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PALO ALTO UNDERPASS DEDICATION 

Extemporaneous remarks at University Avenue ceremonies, 
Palo Alto, March 8, 1941 

Mayor Blois, City Officials, President Wilh^ir, other leaders in the civic, 
educational and industrial development of this community — 
people of Santa Clara Valley 

All of California is interested in this clay of dedications and cele- 
bration at Palo Alto. Interested, not merely because we celebrate and 
dedicate the completion of the modern facilities of transportation which 
are meeting the great needs for public convenience and safety in the 
underpass now so splendidly completed with modern construction — 
not that we are merely enjoying and celebrating the completion of a 
new and modern up-to-date raih-oad station — but because all of this 
celebration and dedication typifies and further emphasizes the work- 
ings of our American democracy. 

We are also here today celebrating the fiftieth anniversary of one 
of the foremost educational institutions in the United States, an insti- 
tution of which all the people of the State of California are justly 
proud. 

Looking backward, we review the fifty years of development and 
growth of Palo Alto with the growth of that great institution devoted 
to higher education and scientific research. When we do this and see 
the people assembled in enthusiastic pride, in peace and in the demo- 
cratic way of life, this community of Palo Alto and all the adjoining 
communities, and representatives of state and local governments else- 
where know that this is a classic example of the success of American 
democracy. * * * That is the answer to all foreign ideologies for 
those who cheri.sh the success of American democracy. Here is repre- 
sented the progress we can and do make through the working of our 
democratic in.stitutions. 

The developments we are dedicating today, these public improve- 
ments, required that cooperation, that spirit or sense of civic respon- 
sibility on the part of community leaders and of the people as a whole 
in order to produce them. 

When we consider this development at Palo Alto — when we look 
with pride upon it as being one of the classic examples of American 
life and community interest and cooperation, we can point to more 
accomplishments than these modern construction conveniences portray. 
We can point to that cooperation — that successful cooperation and 
accomplishment by the people of Palo Alto for the economic welfare 
of those who are served by its public utilities. 

We have here in Palo Alto public ownership and operation of its 
public utilities, not only of water — but of power and light and gas 
which are so essential to modern living. And this has been accom- 
plished against heavy odds and at the cost of long struggle to remove 
obstacles interposed by narrow private interests. 



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STATE PAPERS AND PUBLIC ADDRESSES 



So we can tliink of tliese progressive accomplishments of this com- 
munity on this occasion wlien we also celebrate all of the rest of these 
snrrounding achievements that we are here dedicating today. 

Of course we know that to make such progress requires an ever- 
lasting struggle. There is no end to it. But it takes time, tolerance, 
devotion and sincerity of leadership and social mindedness in order 
that Ave may elsewhere in the State see communities accomplish what 
Palo Alto has accomplished to better serve the needs and welfare of 
the people by governjuent doing the things which government can do 
best, and most economically, to advance the general welfare. 

Any philosophy of government that stands in the way of that, 
we know to be essentially reactionary. We know this because we can 
point to the progress made here at Palo Alto as the complete answer 
to all who doubt the efficiency and workabilitj' of democracy as a basic 
principle of government. 

You are particularly benefited and have reason to be happy here 
at Palo Alto in the birthday of this great university where the molding 
of the lives of so many of California citizens and leaders in our social, 
industrial and economical life has taken place — where is given the 
inspiration for the high ideals so necessary in these days when democ- 
racies everywhere are fighting to defend their very existence. These 
ideals are weapons and give us the internal strength; our greatest 
buttress against foes of democracy, whether they attack us by military 
force, or by propaganda, or through fifth columnists seeking to under- 
mine the confidence of our citizens in our democracy. 

We know that we are just as strong internally as the faith of our 
citizens in our government — just as strong internally as their con- 
fidence in the ability, not only for our own citizens to preserve their 
own democi'alic institutions, but the abilitj^ for our nation to supply 
world leadership toAvard a higher and higher civilization. 

We can accomplish these things by just such progress as we are 
here celebrating during the anniversary of your great institutions. 
Those ideals, implanted and followed through to progressive purposes, 
on the part of your representatives and officials elected to governmental 
office, will do most to solidify, to inculcate confidence — to make our 
democracy so strong and unconquerable, that we will ride the storm of 
this international chaos that we face. We go forward through expe- 
rience. Further and further shall Ave go to make our democratic 
system Avork more successfully. We shall make it respond to the actual 
economic and social needs of the people, in order that Ave may not only 
enjoy political democracy, but that we may come to the full enjoy- 
ment of the indiA'idual liberties provided by our Bill of Rights. We 
must use our democratic goA'ernnient and processes to serve and adjust 
our internal economy, to secure a just and equitable distribution of 
the wealth produced in our country. We shall then go forAvard Avith 
the development of our great natural resources, so that aa'c may have 
gOA^ernment and communities that are concerned for and devoted faith- 
fully to the social needs, the economic needs, the health and AA'elfare 
of the people AA^ho make up our great cosmopolitan America. 

As GoA-ernor of this great State, I pay my homage to a predecessor 
in that office. Governor Stanford. A\-ho gave to this community and this 
State, this university out of a private fund he had created. And my 



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homa<je to that fjrand first president, David Starr Jordan who, with 
Mrs. Stanford, strug'gled through the first years of tlie university to 
make it a success. My compliments, also, to President Wilbur for this 
university's very signal success as a great American college, and for 
the splendid foundation it has to assure future success. 

I wish to pay my compliments to the mayor and the city govern- 
ment of Palo Alto for the manner in which they have brought about 
and organized so successfully this day of celebration we are all met 
to enjoy. 

I want to say to you sincerely that it has been a great treat and 
a pleasure for me to be here. I have enjoyed so much seeing the 
modern improvements we have gathered here to celebrate, but even 
above that I have enjoyed seeing the wonderful community spirit here 
displayed. It means so much to our American life, so much to our 
great State of California which I am proud, so proud to be identified 
with on occasions like this. 

I thank you. 



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STATE PAPERS AND PUBLIC ADDRESSES 



ST. PATRICK'S DAY— 1941 

Message of greeting at annual luncheon, 
March 16, 1941 

My Fellow Americans 

Fellow Men of Good Will Throughout the World 

This is a jjreat meetinpr. It is truly enconra<riiig:, truly inspiring 
because the men and women who have gathered toprether here are repre- 
sentative of all creeds and persuasions. Perhaps St. Patrick's Day 
belonprs more especially to the Irish, but every year, all America does 
honor to the memory of the prreat patron saint of Ireland. This occa- 
sion is doubly auspicious because we are really assembled here in the 
name and cause of brotherhood amonpr men and peace amou<r nations. 
We are assembled here to hold aloft the torch of freedom and to cele- 
brate the ble.ssinprs of liberty. We are assembled here to assert the 
virtues of love, tolerance and nnderstandinsr. 

Without these virtues, there can be no brotherhood, no peace, no 
liberty; nor the unity to support them. But with these virtues, we 
can have them all. With these virtues, we can come to enjoy the peace 
that attends freedom from class hatred, freedom from prejudice, free- 
dom from bifjotry. With tliese virtues we can all come to "behold how 
good and how pleasant it is for brethren to dwell to<rether in unity." 

The people of California felicitate themselves that men and women 
can and do jrather in such vast numbers for such high purposes. And 
they congratulate those responsible for and participating in this meet- 
ing. As long as men continue to be inspired by the sentiments wliich 
here join us all together in the common bonds in brotherhood and 
understanding, we know that the fires of liberty are unquenehed ; we 
know that democracy is invincible in its strength ; and we know that 
there is hope for a new and better world for all mankind. 

I am proud to here speak for the people of California, and to 
extend their warmest and most friendly greetings to all Americans, to 
our American neighbors to the north and to the south, and to all men 
of good will throughout a troubled world. 



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LANGLEY PORTER CLINIC 

Address on occasion of laying of cornersfcmc at new medical center, 
San Francisco, April 5, 1941 

Ladies and Gentlemen 

We are here to lay the cornerstone of a building which is important 
enough just because of its size and cost, but which is of transcendent 
importance because of Avhat it means to the science of medicine, because 
of what it means to government, in general, and our State Government 
in particular, and above all because of what it means to the people. 

It is altogether probable that the people of our great land have 
never experienced such a prolonged or so prolific a debate over what 
government should or should not do to establish justice, insure domestic 
tranquility, promote the general welfare and secure the blessings of 
liberty, as during the past ten years. Much of this public debate has 
had to do with unemployment and its train of poverty, malnutrition, 
sickness and general misery. It has been a debate between those, on 
the one hand, who demand that government take no steps toward a 
planned economy, that government let things go as they may in the 
struggle for existence and advantage, let private and public bank- 
ruptcies proceed to their logical conclusions, let those survive who can, 
let economic activities reestablish themselves at whatever new levels 
time might bring ; and those, on the other hand, who, believing that 
social upheavals and violent revolution are the inevitable result of the 
do-nothing policies of a laissez-faire society, demand that government 
do something to rationalize our economy, eliminate poverty, establish 
economic and social security, and restore and rehabilitate the physically 
and mentally handicapped members of society. 

I draw attention to this because, in the midst of so much debate, 
it is so great a pleasure to take note of real action on the part of gov- 
ernment to actually promote the general welfare. 

And this is exactly what we are doing here today; taking note, 
rejoicing, because government, in this case our State government, is 
undertaking an expansion of its general welfare activities. As meas- 
ured by its cost in dollars, this particular expansion may not be so very 
large, but it is of far more than ordinary significance as a measure of 
advance in human progress, responsible social thinking and responsible 
social action. 

We gather to celebrate the start of construction and to lay the 
corner stone of an addition to the State's physical plant for the care of 
those suffering from brain and nervous disorders, and the mentally 
deranged. At the same time, it is also an addition to the facilities of 
our University of California School of Medicine; not only for the 
teaching of medical students, but also for the broader training of those 
who now administer our State institutions for the care of the mentally 
sick. And, over and above all this, it is also to be a center for research 
into the as yet hidden mysteries of mental diseases, their causes and 
cures and their relations to other body ailments. 



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To the general public, and to us assemblorl here, T am sure that 
these objectives are wholly praiseworthy ; the proper subject of accept- 
ance and approbation by all respectable people. But we have to cast 
back into history only a very few years in order to realize that this 
venture, this hospital and the activities which will be carried on in it, 
are in reality a most important milestone of advance, of true projrress. 
in medical science, in social, lesral and economic concept, in social prac- 
tices, and in society's attitude toward the social sciences, the exact 
sciences, and the humanities. 

As for the humanities aspects, history reminds us that up to the 
time of the French Revolution, patients afflicted with mental disorders 
were customarily committed to the prisons, there to be cared for by 
the prison officers and jrunrds; or else they were committed to the mercy 
of tlie poor-law authorities. Tn some church institutions, they were 
placed under the supervision of the clergy. 

Rut durinir the French "Revolution, it so happens that one Philippe 
Pinel, a physician, became interested in the problems of insanity. As 
a result of his studies, he evolved and advanced the then revolutionary 
theory that mental disorders were properly the business of the medical 
sciences and medical doctors. He succeeded in puttinpr an end to the 
practice, universal until his time, of keepincr mental patients in chains. 
He studied these patients from a medical standpoint and he was the 
author of the first systematic textbook on mental di.seases. His works 
led to the sefjrepration of the insane, not in prisons or poorhouses, but 
in special institutions referred to as insane asylums. 

In these days when no one any lonjrer questions the philosophy 
underlyinpr Pinel 's reforms, it is difficult to realize that at that time, 
they were subjected to the bitterest of opposition. It is difficult to 
realize that even thoup:h they were sesrrejrated, insane patients received 
care but little more humane than before Pinel 's time. 

It has required many years of patient struprjrle ever since then to 
chanpre public thinkinpr from the concept of asylums, with mere cus- 
todial care, to hospitals, with scientific medical treatjuent and observa- 
tion, lu. fact, the latter have become common in very recent years. 

History also discloses that we have achieved ^reat progress in 
respect of the scientific and research aspects of the venture we here 
undertake. Tn the seventeenth century the great physician and scien- 
tist Melpighi Avas the object of innumerable, and to us, absurd attacks 
because he hoped to discover, by the processes of dissection, experi- 
ment, observation and research, the causes and cures of human ailments. 
One of his contemporaries undertook to prove the futility of his scien- 
tific methods and wrote as follows: "Of what use is the knowledge of 
the structure of the lung and stream of blood through it? Everyone 
knows that animals breathe, but no one knows why, and it juay be said 
tliat even in this modern seventeenth century, with all this new knowl- 
edge at our command, we are not even quite as successful in curing 
pneumonia as were the fathers of old. 

"Everyone thought, until the work of Wirsung, that the pancreas 
was ju.st a cushion to .support the stomach. What better off are we to 
know that it is a duct? Above all, of Avhat use to cut up plants and 
study the hatching of eggs? Can we cure the troubles of women, 
knowing how the hatching of eggs goes on?" 



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And such was indeed tlie attitude of medical men at that time, 
when the barber sursreon had the techniques and the physician had 
only the theories. We of today know that those who then so hopelessly 
delved into the complex material that no one knew what to do with, 
did perform a fireat service. We have abandoned their notions which, 
in their sum, we of today would be inclined to call a sort of "jiiris- 
prudence" of medicine. We no longer talk about the divine purposes 
of the various organs of the human body in an attempt to make it 
appear to be a lofjical and rational piece of construction. 

To a layman, like myself, it does indeed appear that we have made 
true progrress. 

A corner.stone is for the information and edification of those who 
come this way lonp; after we shall have passed on. So, in a very exact 
sense, the thinprs we say here are said as much for the benefit of our 
children's children's children, as for ourselves. Some day, this build- 
m<x shall have served its purposes. Tt will be torn down, or perhaps 
destroyed by some catastrophe. And they will pry into the metal box 
in this cornerstone and read the account of this simple ceremony and 
the hi<rh purposes for which we are about to erect this buildinfj. To 
them we declare our belief that our fjeneration stands at a level of 
culture and civilization "u'hich represents most substantial pro<rress 
.since the sixteenth and scA'cnteenth centuries when capitalism was only 
emer<rino' out of its feudalistic chrysalis to try its winp-s in the world 
of Adam Smith. We hope that, at least partly because of the researches 
which will be carried forward here, our children's children will be able 
to be as much impressed with their advances beyond us as we are 
impressed with the advances that have been made since the days of 
Melpigrhi and Pinel. 

We hope that they and their nations and sovernments shall have 
learned how to live in peace and in harmony. We hope they shall have 
learned how to distribute rationally the jrreat plenty that we have 
learned how to produce but not how to divide. We hope that they shall 
have retained all the physical, mental and spiritual vifror that fjrow out 
of the struprjrle for existence, but, at the same time, we hope that they 
shall have achieved the full blessings of liberty. We hope they .shali 
have learned that there may be a very real difference between pros- 
perity and security. And we hope that they shall have both. 

In what I have said I do not intend to imply that this clinic, when 
completed, will have materialized out of Nature's pure evolutionary 
processes. Tt is built on this spot, and at this time and for the pur- 
poses T have mentioned, primarily because of the vision, the demands, 
the efforts, the persistent efforts of a handful of thousjhtful, deter- 
mined men and women; flesh and blood people whom we know. 

We name this hospital the Langley Porter Clinic because Dr. 
Lanpley Porter was for many years, endinp: only a short while ago, 
the Dean of this great medical school. During these years of service 
he integrated its parts, perfected its organization, and helped raise it 
to the high standing it now commands as a seat of learning and of 
service to mankind. 

For a long time Dr. Porter saw the need and advocated the con- 
struction of a hospital such as this, in close proximity to the Medical 
School. His social-minded interest, his determined advocacy served to 



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promote pnblic recojrnition of the very practical results that we have 
every ri^rht to expect from the healing services to be rendered, the 
learninfr to be prained, and the richly fruitful research to be conducted 
in this, the Lanp:ley Porter Clinic. 

To me, the prime mover of the project to build this hospital was 
Dr. Aaron J. Rosanoff, the State Director of Institutions. Two years 
ago, after the State budget had been fixed for submission to the Legis- 
lature (a budget in the making of which he had no part), he persuaded 
me to include in it the cost of this project, which I did, although with 
but little notion that it would receive legislative approval. But thanks 
to his tireless efforts acquainting the Tjcgislature with the lasting bene- 
fits that would accrue to the mentally afflicted, to society in general and 
to the T'niver.sity School of Medicine; to say nothing of the substantial 
savings that would accrue to the Department of Institutions, the appro- 
priation was approved. To this audience it is not necessary to recount 
Dr. Rosanoff's outstanding achievements in the field of applied psy- 
chiatry. I have found him possessed of keenest intellect, a sure knowl- 
edge of his profession, broad vision and highly social attitude. These, 
combined with his rare tact, executive ability and sure sense of the 
needs of his department, account not only for the success with which 
he has met in his profession and in his work of administering the State 
Department of Institutions, but also for his success in obtaining the 
legislative appropriation which made this clinic possible. 

To him, and to the members of his able administrative staff, great 
credit and this publicly expressed thanks are due for making this 
clinic a reality. 

It is proper, at this point, to render praise and to publicly thank 
the following persons and organizations whose valuable efforts and 
support were necessary to and became a part of this project: 

To Dr. Robert Gordon Sproul, President of the University of 
California, and the I'niversity Regents, for making this ground avail- 
able to the Department of Institutions. Much of the value of this 
clinic will lie in the fact that it is made a part of the School of Medicine. 

To Dr. Sproul and the Regents, and to the members of the staff 
and faculty of the School of Medicine, for their enthusiastic acceptance 
of the clinic as a natural adjunct to and part of the School of Medicine, 
and for their strong and effective support of the project to build it. 

To the members of the State Legislature who voted to appropriate 
the main portion of its cost. 

I must confess a personal pride in the part it has been my good 
fortune, as Governor of California, to perform in bringing this great 
and beneficent project to fruition. 

It would seem strange, not to say unseemly, if I failed to make 
mention of the fact that we are launching this undertaking in the 
midst of a world at war. 

Let me observe therefore that this clinic is a place for the pursuit 
of science, and an example of its application to the most humanitarian 
of objectives; the saving of human minds and lives, and the improve- 
ment of the race. It is peculiarly a project in pursuit of peace. But 
even so, it certainly provokes thought to realize that if we only knew 
how to apply, in the field of world politics, what men of science already 
know about abnormal psychology, particularly paranoia, we would 



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today be having far less trouble with the dictator complex which possess 
a few men who, unfortunately for mankind, happen to be in power. 
This, of course, is a negative statement. The positive, the hopeful 
statement is this : The proper and effective application in the field of 
politics and government, of what these men of science already know 
may well become one of democracy's most powerful and effective instru- 
ments, quite the equal of war ships, planes, guns and soldiers. 

The present world situation is preparing for scientists the most 
urgent problems they have ever yet had to tackle. Epidemics of dis- 
ease, famine, social disclocation and mass frustration are developing 
in the war countries. They will spread to the rest of the world. And 
at the very time when most needed to combat these evils, the work of 
scientists is being disrupted. The prospect of serious impairment, the 
possibility of the permanent disablement of society by the disruption 
of science is particularly disquieting. We must persist in our efforts 
to understand and control the forces of nature. We must do this 
because it is essential for the survival of civilization. Without science, 
the world could not support more than a fraction of its present popu- 
lation. 

Let us therefore make of this ceremony a prayer; a prayer that 
in this broad and beautiful land of ours, science shall continue to 
flourish and that we shall make of it, and keep it, an instrument of 
peace and democracy. Let us make of this a moment of quiet determi- 
nation. 

I thank you. 



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STATE PAPERS AND PUBLIC ADDRESSES 



COUNCIL AGAINST INTOLERANCE IN AMERICA 

AJtlrcss at San Francisco meeting. Palace Hotel, 
April 5, 1941 

Ladies and Gentlemen 

A few preliminary words of definition may be in order. Tolerance 
is one of those polar words, so full of traps to the unwary man who 
tries to describe what is going on around him. I shall illustrate what 
I mean. The word up has no meaning apart from the word down. 
The word fast has no meaning apart from the word slow. And in 
addition, such pairs of words have no meaning even when used together, 
except when confined to a very jiartieular situation. When Dr. Ein- 
stein realized this fact in his study of physics, he proceeded to call it 
a principle and dubbed it "relativity." 

So, likewise, justice and injustice are polar words encountered 
in the study of social institutions when we get to talking about the 
organization and objectives of government. The reformer who wants 
to abolish injustice and build a world about himself in which nothing 
but justice shall prevail, is like a man who wants to make everything 
up ; nothing down. 

The battle between justice and inju.stice is really quite a struggle. 
It creates activity. It leads to change. It also leads to wars occa- 
sionally. That which we call "progress" is a consequence of this 
activity but so also is that which we call "reaction," the polar word 
to progress. Our enthusiasms are aroused by such words and there- 
fore they are often found to be excellent tools with which to push 
people around. A few years ago both the rebels and the loyalists in 
Spain were fighting, so they said, for justice. That is what enabled 
them to kill so many i)eople in such a consecrated way. 

Well, tolerance is just such a word ; a polar word. It has little 
meaning apart from its antonym, intolerance. 

Tolerance, like the word justice, is a word with which to conjure. 
We refuse to apply it to people who are struggling for the things which 
we do not like. 

You may not agree with what I say. In fact, you may actually 
dislike what I have to say. You may dislike me in the bargain. Toler- 
ance is that virtue which enables you to forbear my facts and opinions. 
It enables society to allow that which may not be wholly approved 
by all members of society. Tolerance is prerequisite to a recognition 
of the rights of the private individual to his own opinions and practices. 

We .speak of tolerance as a virtue. Of course, this is true only 
in the relative sense. There are times and circumstances when it is 
even more than a virtue ; when it becomes a positive necessity. Again, 
there are other times Avhen it ceases to be a virtue. In other words it 
all depends on time, place, circumstances and the direction in which 
or the object at which the particular tolerance is pointed. 

For example, American history discloses that some of our fore- 
fathers were quite intolerant of the other fellow's religious beliefs or 



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his failure to pay his debts; while some others were almost unbeliev- 
ably, we mipht say immorally, tolerant. They stood for quite a lot, 
for a lon<i' time, from the Enji'lisli Crown in the way of oppressive 
taxes and suppressive legislation. 

Our history shows numerous instances of intolerance on the part 
of limited groups. At one time or another we have seen it directed 
at one or another religious group, at fraternal groups, and at racial 
groups. 

In older countries where most of the people were of one religion 
or one ethnological group, and where, therefore, the population was 
homogeneous to a high degree, there was relatively little intolerance 
evident within the country. Therefore, there was relatively little need 
for the preaching of tolerance. Intolerance became evident, and 
strong, only as directed at other countries and other peoples, with whom 
they probably had had almost no contact and with whom they did not, 
however, have to live. 

But in our country, where from the earliest days, people came to 
escape one sort or another of suppression and oppression, where, since 
earliest settlement, people of all races and creeds and shades of belief 
came in search of freedom ; freedom of mind and religion as well as 
economic freedom; we have found constant and continuing need for 
tolerance within our own land. We needed it in order that we might 
live together as neighbors, as good neighbors. 

Thus, in America, tolerance has been a very practical and useful 
virtue. It has given rise to such typical American concept as "live 
and let live" and "fair play" and "give him a chance." Tolerance, 
in other words, has become a habit; an inseparable part of our demo- 
cratic process and our acceptance of majority rule with its provisions 
for the protection of minorities and their rights. 

Today we can truthfully say that the American people, as a whole, 
are remarkably free from religious intolerances. 

We have also become remarkably tolerant of variations from the 
norm of political belief and behavior. It is only under stress of war 
that political intolerance occurs. Today we are intolerant of the activi- 
ties of Communists, not so much because of their economic beliefs but 
because their activities are directed by the dictator of a foreign coun- 
try for the purpose of establishing a like dictatorship in America, 
through power polities and through violence, sabotage, and any other 
unlawful means. For like reasons, we are also intolerant of Fascist 
and of Nazi activities in our midst. Because we are a democratic 
people, we like being a democratic people, and we propose to remain 
a democratic people. We instinctively fear, dislike, and distrust, and 
in order to preserve democracy we are of necessity intolerant of doc- 
trines which deny the concept of democracy. We instinctively distrust 
those who engage in activities to destroy democracy, and its working 
tools, tolerance and our American civil liberties, in order to replace 
them with dictatorship, hatred, intolerance, and the suppression of civil 
liberties by unrestrained brute force, torture and deatli. I realize that 
right here we encounter one of the very fine points of logic concerning 
democracy and tolerance. Just how truly democratic are we if we 
are not democratic enough to permit the propagation of antidemocratic 
doctrines and acts ? My answer is that if we want to retain democracy. 



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we can ill afford to be tolerant of doctrines which deny democracy and 
practices which would deprive us of both democracy and tolerance. 

In other words, I conceive tolerance to be a virtue and a positive 
necessity to the democratic way of life when it is tolerance of relig:ious 
differences, when it is tolerance of racial or ethnolofrical differences, 
and when it is tolerance of the very, very broad differences of political, 
social and economic opinion which we know to be possible within and 
perfectly consistent with the principles and practice of democracy. 

And this, I take it, is really the sort of tolerance we are here to 
extol and promote. Tolerance as between individuals and groups of 
persons within our own national. State and local communities. 

I shall not <ro into the subject of tolerance as between nations 
because there would be no end to the subject; no place to stop. I 
shall ob-serve only that Britain's rulers, prior to September 1939, exer- 
cised a tolerance of Hitler and his doctrines and activities that cer- 
tainly ceased to be a virtue. Tolerance became appeasement, an abso- 
lute vice out of which, should Hitler now win. may come slavery, 
cruelty, and oppression, and a literature of sorrow. I express the 
hope that we shall never misapply tolerance in any such manner or 
carry it to any such length. 

But as for tolerance between and among individuals and groups 
within our own country; as for religious, racial, political, social and 
economic tolerance within our own borders, it seems to me that it is 
most timely that we undertake to extol and promote it. 

As I have .said, we are a democratic people. We have a democratic 
government which has as its standards, and undertakes to guarantee 
to its citizens, certain rights, which stem from man's quest for free- 
dom, from his instinct for brotherhood, and from his love for the 
dejnocratic principles of government so firmly and so securely estab- 
lished by our colonial forebearers. 

We live in what historians may some day describe as one of the 
most fearful, one of the most awful periods in man's history. The 
black clouds of Avar envelope the eastern world, and now east their 
dark shadows across our own country. 

If we prove unable to protect ourselves, against the ravages of 
this war, the destruction of our government, and the loss of our Amer- 
ican liberties may follow. We do know that this we are determined 
to prevent. 

The battle for democracj^ must be carried to every front; the 
military front and the home front. Defense of democracy will have 
many component parts; some objective and some subjective. The objec- 
tive components will consist of the things we can see and the things 
we can make and do with our hands and bodies; that is, ships and 
planes and guns and tanks and ammunition and all of the thousands 
of things and materials requisite to outfit our fighting forces. They 
will consist of training the men who will be these forces and the men 
and women who back them up on the farms and in the factories and 
in the transport industries. These are comparatively easy to organize. 

The subjective components of defense are a much more difficult 
matter. They are of the mind. Nevertheless, they are just as neces- 
sary as the material and objective components. 



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In a democracy, we must first have the determination to defend 
and this requires unity of purpose. This does not mean that we must 
have agreement on all matters of religion and race and polities and 
social concepts and the like. But it does require tolerance, of each 
by the other. And for tolerance we need knowledge. And for knowl- 
edge we need education. 

We look to educated men for military genius and leadership, to 
organize the production and assembly of materials and the training of 
men to use them. 

We look to educated men for knowledge of the ills which beset 
society; for the genius, the determination and the courage to apply 
their knowledge. 

We look to educated men to proclaim, again and again, to state 
and restate the principles of democracy for which, we now realize, 
men have struggled in all ages. Democracy, which permits man to 
express his highest hopes, and work out and achieve his highest aspira- 
tions. 

We look to educated men to organize and apply the full strength 
of our National Government which is the instrument of American 
democracy. 

Here, then, we find todaj's full reason, todays complete justifica- 
tion for the great wealth and the years of labor the American people 
have poured into their educational system ; to make it comprehensive ; 
to make it universal and effective. We have found that it pays. 

In education we find knowledge ; knowledge of our own problems ; 
knowledge of the other fellow's problems. Knowledge is attended by 
tolerance. Tolerance is the indispensable ingredient of unity. And 
in unity is the strength out of which democracy shall survive and 
flourish. And it is out of democracy that we shall secure the blessings 
of liberty to ourselves and to our posterity. 

Education for tolerance must be a part of our program for national 
and home defense. 

Yes, indeed. 

I thank you. 



20—18527 



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THE AMERICAN LEGION 

Address before Annual Con i Tut ion of the Depart ntent of California, 
Sacramento, August 12, 1941 

Commander FarrcU, Memhcrs of the American Legion 
and Fellow Americans 

During the march of time, since I had the honor of addressing 
the annual convention of the California Department of the American 
Legion at San Diego a year ago, we have witnessed fast moving events 
and developments in the present world war. "We have also witnessed, 
with reasonable satisfaction, the program of the preparation of our 
country for its defense and for war if destiny determines that necessity, 
for the protection of all that American life and American freedom 
means. We liave also witnessed precautionary steps taken by our 
National Government in building defense bases in our outposts in the 
Atlantic and in the Pacific, and we have witnessed America's deter- 
mined policy of furnishing all possible aid in war materials and sup- 
plies to England and other countries fighting to prevent their domina- 
tion and the domination of the world by the ruthless war machines 
of the world's and of civilization's worst outlaw's, known as the Axis 
Powers. 

In my speech to your convention at San Diego last year I stated, 
"By law, confirmed by long usage, in America we delegate the framing 
of policy to the Congress and to the Chief Executive of the Nation. 
While this policy is in course of framing, it is proper, it is right, in 
fact, it is vitally necessary, that every point be debated fullj' and that 
every variety and conflict of viewpoint and belief be expressed in 
order that our policy shall be a strong and effective synthesis of the 
forces which make for national unity. But once that policy has been 
determined, then all citizens must subdue their differences and bend 
their energies to the execution of the National Defense Program built 
upon the policy thus determined." 

It is unfortunate, however, that there are those, even occupying 
offices of great honor, distinction and influence; Senators and members 
of Congress, representing minorities, are found not only failing to 
subdue their differences and bend their energies to the execution of 
the National Defense Program built upon policies determined by the 
Congress and the President, but stubbornly continuing those differ- 
ences, often with an unbecoming bitterness, which only serves to 
magnify in the minds and propaganda of those agents of war and hate, 
the totalitarian dictators, a pliase of disunity in our nation. Criticisms 
of the President in carrying out foreign policies approved by Congress 
after thorough public debate, only serve to promote a disunity of 
minorities. In the discharge of his grave responsibilities as Chief 
Executive to take every precautionary step deemed necessary or advis- 
able for our defense, the President, whose anxiety to avoid our entering 
this world war is as keen and sincere as is that of the mother of any 
boy who may be called into our military service, should not be ham- 



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pered, and his position should not be weakened by a character of 
criticism or other manifestation implying substantial disunity in 
America. 

The United States of America is not going into this war unless 
the people of the United States determine that we should do so as an 
inevitable necessity to the preservation of all we hold dear and in the 
discharge of our responsibilities to the rest of mankind. No President 
or Government of the United States of America has ever taken this 
Nation into any war except in response to the overAvhelming sentiment 
of the American citizens, and I think it can be safely said that no 
step has so far been taken by our President or the Congress of the 
United States toward military and naval preparedness, or to head olf 
and keep as far from our shores as possible the advancing forces of 
Nazism and Fascism, which has not been in accordance with the over- 
whelming sentiment of the people of the United States. It is gratify- 
ing to note that the great majority in both houses of the Congress and 
the President are in harmonj^ regarding every step so far taken as a 
measure of defense and in aid of the battling Democracies struggling 
for their lives in the rest of the world. 

But only a few days ago, Hitler and his Axis Powers were given 
comfort and encouragement to believe that American unity and sup- 
port of our government does not exist, by a statement issued by certain 
partisan leaders and political opponents of the President, saying that 
recent events raise doubts that this war is a clear cut issue of liberty 
and democracy; that because Russia is being attacked by the forces of 
Hitler, and because of the Anglo-Russian alliance in fighting those 
forces, this world war is not purely a conflict between tyranny and 
freedom. They state that "the representatives of the people in pass- 
ing the lease-lend bill, expressed the national conviction that preserva- 
tion of the British Empire and China is desirable for us and for 
civilization, ' ' but elsewhere they say ' ' freedom in America does not 
depend on the outcome of struggles for material power between other 
nations," and they severely criticize the President for his acts in 
carrying out the policy and purpose of the lend-lease act. Yet it may 
well be very seriously doubted whether, if either of the partisan leaders, 
opponents of the present national administration, were now President 
of the United States, he would not be following public sentiment and 
the same wise course that the President is following for America's pro- 
tection against the forces of hate, brutality, and destruction of Christ- 
ian civilization. This is not the first time that strong partisanship has 
stood in the way of national unity of purpose for the accomplishment 
of world peace and the preservation of democracy and democratic 
ideals in this world. In that cause we entered the first world war, to 
the end that we would, upon its close, take the leadership of the world 
in the establishment of a League of Nations to enforce peaceful settle- 
ments of international disputes, to regard the economic necessities of 
the peoples of the various countries of the world, and the adjustments 
needed for their well-being, to establish a world court of international 
justice, and thus respond to the hope of mankind for a world order in 
which the horrors of war could find no place. But that end was not 
fulfilled. Bitter political opponents of President Wilson, like present 
day bitter political opponents of President Franklin D. Roosevelt, and 



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bitter-end isolationists in onr own eonntry prevented this achievement. 
No one is wise enoiinrh to say witli absolnte assurance, but there is jjood 
reason to assert, that liad the Leajrue of Nations, advocated by President 
Wilson, been established with tlie whole-hearted participation therein 
by the United States, this second world war would not be upon us. 
We would not now be facing tlie possible necessity of enterin<r another 
war, this time to protect the western hemisphere and its peoples' free- 
dom against domination by the world's international outlaws. That 
timely protection wliich President Roosevelt aiid the Congress are 
endeavoring to afford by giving every possible aid to all nations fight- 
ing the advancing war machine of Hitler should not be sabotaged by 
the carping criticisms of political partisans. 

We are faced not only with the question of going just as far as 
may be deemed necessary to assure the freedom of the western hemi- 
sijhere from invasion in any form, but also, as the greatest nation on 
earth, with our responsibility to mankind in the midst of this world 
chaos. Will eitlier our safety be assured or our responsibility to future 
generations be discharged by attempting to isolate ourselves from all 
the implications of the constant advance of the cruel forces of law- 
lessness and hate in their purpose to dominate the world ? Dviring 
that advance, can we righteously give aid and moral support to the 
brutalities of the totalitarian dictators by remaining neutral? Shoiild 
we not consider our responsibilities to civilization as well as our own 
safety? Indeed, it is a question of whether these considerations can 
be separated, even from the purely selfish standpoint of our own secur- 
ity. We can not isolate ourselves from the rest of the world, because 
we are a part of it. 

Until the brigands now at large, dominating, murdering and enslav- 
ing the peoples of Europe, and threatening to dominate the rest of 
the world by force of arms, are forcibly suppressed, all will agree, 
including our i.solationist-minded leaders, that we must continue with 
the militarization of America in anticipation of ultimate and continuous 
war, defending against their advancements in the western hemisphere. 
It seems to me the isolationists are somewhat inconsistent on this ques- 
tion. While agreeing with the expenditure of billions upon billions 
for our national defense, they say we need have no fear of the Axis 
Powers; that they would not attempt an invasion of this hemisphere; 
we are too far removed from the present scene of war and too far 
separated by seas to make it practical for those powers or any of them 
to endanger our security here. If that conclusion is sound, why is all 
this preparedness against sucli danger? It must be because all realize 
that we do face that danger. 

We are supporting England in her fight to the utmost extent 
without actually entering into the war as a combatant, because there 
is no thinking penson in America who does not believe that if England, 
and now Russia, are able to withstand the attacks of the forces of 
Hitler and finally defeat them, our safety will be assured. We can 
tlien be relieved of the burden of great military preparedness and look 
to the reestablishment of peace. But if Russia is defeated and Eng- 
land falls, which is not at all unlikely, then we will be in for an 
interminable period, during which the Americas will be on tlie defen- 
sive, ultimately forced into war for the protection of the western 



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301 



hemisphere against invasion, and for the preservation of American 
life and institutions, carrying the burden of huge military forces, and 
fighting alone the military forces of the Axis Powers then in control 
of the rest of the world. 

Contrary to propaganda which the Nazis and Fascists would like 
to have the American people believe, we have no such thing as war 
mongers at the helm of the Government of the United States or in 
any of its departments charged with the responsibility of keeping close 
watch on every development and taking such steps for our protection 
as their direct and, to a large extent secret, information compels. They 
are in a position better than those of us who do not have that respon- 
sibility, to know what strategic steps are necessary, what outposts must 
be supplied with means of defense, what steps become necessary in the 
war's developments to carry out America's declared purpose to give 
every possible aid in the way of war materials and other supplies to 
the nations now fighting the Axis Powers. Bitter and acrimonious 
speeches by men in public life, and like manifestations of opposition 
to every precaiitionary step taken as a means of preparedness and 
readiness to defend against the approach of Nazism, can only give 
encouragement to Nazism's further advance, and is spread among the 
people of Germany, Italy and Japan to help their dictators bolster 
their morale and the morale of their fighting forces. They are thus 
led to believe that the American people are divided in their opposition 
to a world order of human enslavement which these dictators propose 
to establi.sh. It gives aid, comfort and encouragement to such fifth 
columnists as may be working in our midst. Therefore, let us work 
for national unity. Let us strengthen, not weaken, the hand of the 
President, in whom the people have placed their confidence. Let us 
strengthen the courage and will of all peoples fighting against attacks 
and despairing of relief from their enslavement by the forces of Nazism, 
hate and brutality. Let us aid in solidifying the unity of the Amer- 
ican people and all the Kepublics of this hemisphere for its common 
defense and shorten the period during which the world is to be terror- 
ized by the world's worst enemies. 

Let us also profit by the lessons we learn through national unity 
for our common defense. When peace is restored, and we face the 
economic and social problems remaining to be solved in order to provide 
for the material well-being and social advancement of the masses of 
the people, let us continue that unity for the purpose of establishing 
an order of economy and social justice, which is impossible of achieve- 
ment with disunity and imder a philosophy of government based upon 
rewards for individual selfishness and greed instead of service to society. 

I am pleased to be able to report to you that our State Council 
of Defense, provided for by an act of the Legislature, is functioning 
in accordance with organization plans adopted when I first appointed 
a State Council of Defense more than a year ago, and in accordance 
with all directions received from the National Defense Advisory Coun- 
cil and the National Civilian Defense Authority. Our State Guard is 
being recruited rapidly and trained for all civil protection, and it will 
not be long until it will have an adequate personnel and be in condition 
to meet all of the requirements of our home defense program and serve 
all of the purposes of the National Guard, during its participation as a 



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part of the Federal forces. The various committees of our State Coun- 
cil ai'e being ornranized with the volunteer services of those most compe- 
tent and experienced in the particular lines of activities involved in 
civil defense work, whether it be in the field of education, health, 
natural resources, labor resources and skills, or in the performance of 
other functions for which preparation is required in a complete pro- 
gram of home and civil defense. I appreciate the sincere interest and 
thorough cooperation of the members of the Legion in this work. Your 
President is a member of our Council, your members are on various 
committees of the Council and constitute a large part of our State 
Guard. 

Tt is not alone in connection with the organization and work of 
our State Council of Defense that I have found agreeable cooperation 
from this organization and its members in the performance of my duties 
as Governor. Your membership has a direct interest in the work of 
the Veterans Welfare Board, in the Yountville Home and in the 
revenues supporting it. in adult education, in finding employment for 
veterans, and in providing aid for the helpless and general relief from 
hardship caused by unemployment. 

You have received the report of Chairman Boicelli of the Veterans 
"Welfare Board of the accomplishments during the past year of meas- 
ures, policies and administrative work of our State agencies which 
directly affect the welfare of members of this organization. As to the 
administrative work of the Veterans "Welfare Board under Chairman 
Boicelli in safeguarding its investment of more than eighty million 
dollars of funds, the economies achieved through reductions in admin- 
istrative and operating costs of more than eighty-two thousand dollars 
a year, and the assurance given that the financial condition of the Vet- 
erans "Welfare Fund is stronger than at any previous time, I am sure 
is gratifying to this organization. The credit this report incidentally 
gives me for favoring and approving legislation, aiding the educational 
needs of the children of the veterans in our public schools, in providing 
in the Governor's budget four hundred and thirty -five thousand dollars 
for the immediate construction of a new mess hall at Yountville Home, 
and providing for the immediate construction of Rector Canyon Dam, 
at a cost of nearly fourteen million dollars, assuring an adequate and 
permanent water supply for that home, is, of course, very gratifying to 
me. But there are other measures of a general nature, such as provi- 
sions for fire protection and conservation of our natural resources, in 
the provisions for which I have had the aid and support of this organ- 
ization, and for which I wish to express my gratitude. 

"With a continuance of such cooperation, with a deep sense of our 
responsibility as citizens, as State officials, and as civic and patriotic 
organizations, in the orderly development of our resources, the fair 
and just consideration of the economic needs of our institutions, the 
accomplishment of ,iust labor relations, the peaceful and orderly settle- 
ment of industrial disputes with due regard to the rights of the workers, 
the opening of avenues for employment to veterans and all other 
workers, meeting the relief and health requirements of the under- 
privileged, extension of adult education and vocational training, eco- 
nomical distribution of our public utility services, bringing to the 



PUBLIC ADDRESSES AND RADIO TALKS— 1 94 1 



303 



people our natural gas and electric power utilities at the lowest possible 
cost through the elimination of unnecessary profiteering agencies, as 
well as in the performance of our duties in connection with State 
and National defense, we shall continue to further the progress of our 
great State and serve the general welfare of its people. 



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STATE PAPERS AND PUBLIC ADDRESSES 



THE STATE FAIR 

Address over California Radio System, 
August 28, 1941 

My Fellow Citizens 

Since 1854 California has held an annual State Fair, marking the 
continuous development of California's natural resources and its agri- 
cultural, industrial, educational, and cultural growth. From its small 
beginning eighty-seven years ago, our State Fair has grown until it 
is now recognized as the greatest, the largest State Fair in the world. 
One fundamental reason for this is that California is foremost among 
all States of the Union in the value of its varied agricultural products. 
These annual State Fairs have become a true index to the progress of 
our State in all productive and cultural activities. 

Each year's growth in the scope and extent of the State Fair's 
exhibits and its entertainment features is attended by increasing thou- 
sands of visitors. It is anticipated that the total number of visitors 
to the Fair this year will be approximately one million people, for whom 
adequate facilities are provided to accommodate. 

I speak to you tonight about the holding of this Fair, and as 
Governor to extend to all listeners and to all people of the State not 
only the invitation but the cordial request of my office and of the 
California Agricultural Association — the Fair Board — that all who can 
po.ssibly do so, attend this year's Fair. In doing so you will find 
satisfaction and reward in acquiring useful information about your 
State and will find entertainment affording a relaxation from the ten- 
sion under which all citizens are now placed by the present war crisis. 
You will see exhibits of the resources and wealth of California's several 
counties, of 228 economic crops, ranging from subtropical fruits and 
vegetables to the hardy varieties of northern California climes. You 
will see displayed modern methods and the mechanical progress 
achieved in California industries. Works of the industrial and the 
fine arts, and the progress of our great educational institutions will be 
shown ; also demonstrations of scientific achievements in our institutions 
and colleges. 

Comparable only to the comprehensiA'e display of the high grade 
products of agriculture, is the great live stock exhibit, featuring an 
industry producing an annual income to California growers of two 
hundred and sixteen million dollars. The extension of the best breeds 
of live stock and the growth of this huge industry of California can 
only be realized by witnessing that exhibit. One of the special features 
of the live stock exhibit is presented on Governor's Day, September 
4th, when the colorful live stock parade is held, at which champions 
and prize winners in the contest for awards is witnessed from the 
grandstand. Notwithstanding the high market prices for choice cattle, 
due to war conditions, California's breeders are keeping their herds 
intact for foundation work, and the contacts and sales made as a result 
of the exhibits of the Fair are the background for the steady improve- 
ment of California herds. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 94 1 



305 



The horse show is a ni<ihtly feature during the ten days of the 
Fair. It has become so Avell known that this year exhibitors from 
many eastern states will vie for honors with our own California bred 
stock. Colorful stock horses, great draft horses, representing power 
on the farm and in the six-in-hand combination, will be driven in color- 
ful competition. The Fair offers by far the largest show of horses in 
the entire west. 

California's poultry industry has in recent years made such prog- 
ress that it now ranks highest of any of the states west of the Missis- 
sippi. Substantial State aid has been furnished in the development of 
breeding background for the production of the best grade of poultry 
stock. The poultry exhibit will .show this splendid progress and com- 
mand the interest of all poultry growers. 

Representing 25,000 California boys and girls, the two great farm 
youth organizations, the Future Farmers and the 4-H Clubs, will 
exhibit their productive achievements as rivals of senior farmers and 
live stock raisers. In a group of buildings, completed last year at a 
cost of one-half million dollars, these exhibits of our California youth 
on the farm will be displayed. The growth of these youth organiza- 
tions for training and practice in modern methods of agricultural and 
live stock production, is one of the proud achievements in the State, 
promoted by the Fair. 

The machinery exhibit at the Fair is naturally one of its prin- 
cipal features. Housed in a beautiful pavilion is the display of modern 
farm machinery, road building equipment, and up-to-date mechanized 
equipment in industry. This display is of special interest and also of 
special significance this year, when implement manufacturers are, to a 
large extent, engaged in construction of materials for national defense. 
An interesting section in connection with this exhibit is the school 
for farm boys, girls and women in tractor driving and dual training 
for both farm and defense purposes. 

In the educational building will be found 10,000 exhibits taken 
from work done in the school rooms of our elementary schools, high 
schools and junior colleges. There will be found also the vocational 
arts exhibits. 

The State Fair art gallery will contain selected water colors and 
oil paintings of living California artists, carefully selected by expert 
critics. Of added interest in this gallery will be the salon of pictorial 
photography. 

Progress in floriculture as an industry and as a hobby will be 
beautifullj' displayed in the new Hall of Flowers. This building and 
its exhibits should be seen not only because of the beauty of its features, 
but for a realization that floriculture is now a profitable business indus- 
try in California. The flowers will feature over five hundred thousand 
individual blossoms, blended into a bower of beauty. Not only the 
professional nurserymen, but amateur growers find the opportunity 
there to display their best productions. 

All are familiar with the fact that one of the features of the Fair 
are the races of California bred horses. Not only do the races furnish 
one of the outstanding features of entertainment, but the management 
assures me that this year the entertainment attractions of the Fair will 



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STATE PAPERS AND PUBLIC ADDRESSES 



be more extensive, more varied, and more elaborate than at any time 
in its history. 

It is not any small job to prepare for and manage this great Fair. 
As you know, that is the work of the Board of Directors of the Cali- 
fornia Agricultural Association, who give their time, talents and serv- 
ices to its success. They serve without pay. They now consist of a 
group of thirteen men and one woman, representing various sections 
of the State and its various industries. T take this occasion, on behalf 
of the people of the State, to compliment this Board of Directors and 
to thank them for the splendid services they are performing in carry- 
ing forward our annual State Fair to its great achievements. 

It is the policy of the Board to make it possible for visitors to see 
this exposition at a minimum of expense and to provide suitable facili- 
ties for their accommodation and comfort. A nursery has been pro- 
vided in the Woman 's Building to aid mothers with their small children. 
Trained attendants will be on duty, and a playground has been furn- 
ished for older children under the care and supervision of trained 
personnel. A Red Cross emergency hospital has been established to 
aid and care for anyone in distress, in connection with which Red Cross 
nurses will conduct a display, featuring their services to our State 
and Nation. 

The Woman's Building has been redecorated and improved, with 
lounging space. I can not compliment the women too highly for the 
splendid work they have done in assisting in the establishment of these 
facilities at the Fair. This year women will be honored by a special 
day, Friday, September oth, and preparations are under way to serve 
thousands of women at tea in the new Garden of the Moon section in 
the Hall of Flowers. 

We should derive unusual satisfaction from the State Fair this 
year, because it will demonstrate our strength to perform California's 
part in the present national emergency. I do not like to refer to the 
unhappy theme of war, but we all know that our national safety, the 
liberties we enjoy here in America, enabling us to dwell in peace and 
devote our lives as a democratic nation to the development of our 
national resources and the distribution of their benefits for the common 
welfare of all, to gather at a State Fair as a community of free citizens, 
to celebrate and observe our progress, is all threatened by the implica- 
tions of the present world war. At our State Fair will be visualized 
the evidence of California's vast resources, our ability to produce the 
materials necessary to sustain every effort we are called upon to make 
for our common defense. Therefore, this exhibition will serve as an 
inspiration for our unity in meeting every national emergency. The 
Fair will impress us with the fact that we are the strongest Nation 
and the most favored people on earth, and at the same time, give us 
renewed assurance that if we are compelled to go to war to safeguard 
all that we have and all that we hope for as a free people, we have 
the means to do so and to assist other democracies now fighting for 
their lives. 

Our State Fair is dedicated to peace, but also, for national defense. 
It is the symbol of peace in a war torn world, and of California's hos- 
pitality. It is your Fair. I hope you can and will attend. 

I thank you and bid you good night. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 94 1 



307 



LABOR DAY— 1941 

Address given at Pasadena, September 1, 1941 

Throughout a fairly long public life I have made many Labor 
Bay addresses, but never at a time so full of promise for organized 
labor but at the same time so fraught with danger. 

The paradox in this statement is quickly apparent but it is never- 
theless a true statement of the conflicts inherent in the present situation. 

On the one hand, up to now, there never has been a time in 
America when organized labor was so strong. Its numbers have 
increased at a rate that would have been unbelievable, because impos- 
sible, only a few years ago. 

Manj^ factors have contributed to this growth and to the rise in 
influence, prestige and respectability which has attended it. The main 
factor, the factor giving force and vigor to this rise, has been the 
factor of need, or necessity. For many years our economic system, if 
we may call it that, failed to meet the needs for employment. The 
business institutions, principally corporations responsive only to the 
profit stimulus, seemed unable to collectively serve social welfare, to 
provide full emplo;\Tnent, to produce a flow of goods and services 
equalling the need of the American people, to pay American workers 
the wages needed to buy those goods and services. They seemed unable 
to cope with, much less overcome, the disintegrative forces contained 
within that system. They seemed unable to preserve the system of 
so-called free enterprise until the confidence of the people in that 
American way was severely shaken. 

Whatever the causes, the results were depression, disemplojonent 
and a period of hunger, uncertainty and frustration such as our 
country had never before experienced. 

Following natural law, new institutions and organizations inevi- 
tably had to flow in to fill the social vacuum thus created. 

These new institutions were of two types; governmental and 
private. Both were natural responses to need. 

The new governmental action flowered in such forms as WPA, 
PAVA, Farm Security Administration, the Tennessee Valley Authority, 
financial assistance to needy aged persons, social security, unemploy- 
ment insurance and that great modern Magna Charta, the National 
Labor Relations Act. 

The most important, and certainly the most substantial, of the 
new private institutions was seen in the new rise of the labor move- 
ment. And this, also, was a natural response to conditions which had 
become intolerable. 

To say that the recent rise of the labor movement was made pos- 
sible by the passing of the Labor Relations Act is not only untrue but 
it is beside the point. It is true that the Labor Act did serve to 
facilitate labor organization. But it was a result, not the cause of 
the rapid rise of the American labor movement. In fact, the rapid 
growth of organized labor and the Labor Relations Act itself were 
both results of the same destructive forces I have already mentioned. 



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STATE PAPERS AND PUBLIC ADDRESSES 



It is true that but for the Labor Act organized labor's growth in 
recent years wonld have been much more painful, and labor's gains 
in the field of collective hargaininff would have been much more diffi- 
cult. The process would undoubtedly have been attended by many 
more strikes and much more violence. But, collective bargaining and 
labor's growth would have come, just the same, without the Labor 
Relations Act, which, at best, has only provided the machinery for 
rationalism and peaceful adjustments in industrial relations. The 
proof of this observation lies in the bitter criticism of the Labor Rela- 
tions Act itself and in the sharp legal struggles which have attended 
its early enforcement. It could never have been enforced but for the 
great strength and capacity for growth latent in the organized labor 
movement itself. 

These new reforms, movements, institutions and organizations have 
been the subject of much intemperate and even violent criticism ema- 
nating from those who were thus denied greatly abused powers and 
privileges. Foremost among critics and prophets of doom anent the 
growth of the labor movement has been ^Ir. Pegler, whose mission in 
life seems to be to make it appear that racketeering is a chief char- 
acteristic of the organized labor. 

There has indeed been racketeering, low and despicable conduct 
upon the part of isolated labor leaders and groups of leaders. With- 
out question such men have done great injury to the labor movement. 
Their discovery, however humiliating to the honest union man, is a 
good thing, and the process of removing them, however painful and 
embarrassing, is recognized. But their removal by labors' honest 
leaderships and its ranks as an immediate duty to the cause of labor has 
the assistance of anyone, even the bitterest enemy of organized labor, 
in exposing a racketeer, a crook, a betrayer, a traitor to the cause of 
labor which he pretends to serve, should be invited and welcomed. 

But racketeering is not a characteristic of the organized labor 
movement and no true honest union man or friend of labor consents 
to its being made to appear so. Its presence is deplorable, intolerable. 
Racketeers must be routed out and speedily expelled from the ranks 
of labor when discovered. But this exhortation is not applicable alone 
to organized labor. It applies far more widely to numerous organ- 
izations, corporations and financial institutions seeking profits in the 
business world. Mr. Pegler and the public generally should be reminded 
that racketeers were not first discovered in the officialdom of organized 
labor. Nor are they so often found there as in other activities in the 
complex life of America. An attempt to cover the cases of even the 
stock market and stock jobbing racketeers and financial agents who 
have been sent to our penitentiaries would be an impossible task for 
any columnist. A crook is a crook in whatever institution he is foiind 
but his presence when found does not necessarily condemn the insti- 
tution. 

The institution of reforms and the rise of new organizations, both 
good and bad, have always been attended by such symptoms. They 
are the natural, inescapable consequences of growing up. As illustration 
of what I mean I need only remind that the rise of the 200 largest 
corporations took place at the expense of enormous confusion, at the 
cost of the business lives of thousands of individual business men and 



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309 



small corporations, violations of the antitrust laws, and unfair trade 
practice acts violations of laws enacted for the protection of labor. 

Just as long as there is social injustice there shall also be change 
and reform and new institutions ; and there shall also be those who fear 
those changes and who cry out their fears and criticisms. 

Organized labor can not escape this fact. Organized labor does not 
expect to. In fact, you would not be strong today but for the struggles 
of the past, the obstacles j^ou have overcome. In this sense, the oppo- 
nents of organized labor have served a good purpose, however unfair 
their tactics, however lacking they may have been in survival intelli- 
gence. The essential point is that organized labor has overcome opposi- 
tion and has emerged strong, able to attract, able to organize and hold 
followers by the millions; able to inspire the further growth and the 
maintenance of integrity in the labor movement. 

Here, then, we find the key to organized labor's future; a future 
rich with promise ; the promise of i^ower, dignity and place in the 
councils of the Nation, comforting with its numbers, its contribution 
to the general welfare and the National safety, its responsibility to the 
vast majority of the adult population of the Nation, the men and women 
who work for wages. 

But I have also stated that this is a time fraught with danger to 
organized labor. I refer to the grave threat of dictatorship and totali- 
tarianism to the safety of our Government, our people and our demo- 
cratic principles and institutions, including labor. 

I scarcely need remind you that Hitler and Mussolini have done 
away with all labor unions, not only in their own countries but in the 
conquered lands. It is no longer news that they have reduced even 
their own people to virtual slavery. It is news, but scarcely surprising, 
that Hitler has put two and one-half million war prisoners at forced 
labor; that all able-bodied Dutch men and women between 18 and 25 
must render him six months a year of free labor; that he exacts labor 
service of all able-bodied inhabitants of Moravia and Bohemia, except 
Germans, between the ages of 18 and 50 ; that he has imported into 
Germany, for forced labor service three million workers from the con^ 
quered lands, including Italy (these being in addition to prisoners of 
war) . 

The value of war prisoners and of press-gang laborers to Hitler is 
far greater than their valuable services, rendered free of charge, or 
nearly so. They are hostages; hostages to be held until the conclusion 
of peace. In his hands, they are a terrible weapon, held over the 
civilian population of conquered territories. Hitler holds a hostage 
from practically every family in France. 

To me, it follows that if Hitler conquers, or if the Nazi ideology 
spreads and prevails, the effect upon wage workers and labor unionism 
will be utterly disastrous. It means that organized labor has double 
reason for defeating Hitler. 

First, because American workers want to remain American in all 
of the fullest and highest meaning of the word. 

Second, because American workers want organized labor to live 
and flourish ; because you know organized labor can never fulfill its 
dreams or those of its members in a Ilitler world. 



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STATE PAPERS AND PUBLIC ADDRESSES 



Therefore, I only urge that which j^our own self-interest compels, 
that all men and women who work, all of organized labor and upon all 
labor leaders, join wholeheartedly and patriotically in support of the 
leadership and policy of our own National Government, the Govern- 
ment of the United States of America, to prepare our own defenses, to 
help the powers now engaging Hitler, and, to take every step needed to 
assure our national security with firmness, determination and pre- 
paredness. 

Every thoughtful American hopes war for America can be avoided. 
But I believe every true American prefers war to the loss of liberty. If 
the job has to be done, American workers will do it. 

We also know, onlj^ too well, that after the defeat of Hitlerism the 
tasks of warding off the advance of other strange or luiacceptable 
ideologies, the tasks of establishing a more nearly rational way of life 
here at home ; the tasks of establishing freedom with order, will also 
be labor's task. 

These will be the tasks of all groups in our complex society, but it 
seems to me that they are peculiarly the tasks of organized labor; that 
Ijabor should, and can, and will make signal contribution. 

I said "freedom with order." "We must have both, becau.se neither 
one alone can bring happiness to a people. Freedom, without order, 
is anarchy, with confusion and utter chaos. Order, without freedom, is 
despotism ; in the world of today, dictatorship, with totalitarianism and 
slavery. But freedom with order is the very definition of democracy; 
democracy which shall be social and economic as well as political. 

The hard jobs of tlie world always have fallen iipon Labor. This, 
too, is Labor's job ; the building of freedom with order ; the maintenance 
of American democracy and making it serve the economic and social 
needs of the American people. 

I thank you. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 94 1 



311 



RADIO ROUND TABLE OF GOVERNORS 

Retnarks on Nafion-uUe broadcast over Columbia Broadcasting System, Septem- 
ber 1}, 1941. Also participating were Governor Lehman of New York, 
representing the East; Governor Dixon of Alabaina, representing 
the South; and Governor Stassen of Minnesota, 
representing the Mid-West 



Governors Lehman, Dixon and Stassen, and Fellow Americans 

As Governor of the furthest western State with a coast line of a 
thousand miles along the Pacific, I join with enthusiasm in this broad- 
cast emphasizing the unity of the States in support of the foreign 
policy of the President of the United States in the present world crisis. 

I am happy to be able to announce to the world that California 
is solidly united with the rest of the States in sustaining every step 
taken by the President and the Congress for the defense of the Amer- 
icas and for furnishing aid to the British Commonwealth, to Russia 
and to China in their fight to stop the aggression of the Axis Powers. 

The overwhelming sentiment of the people of this great State 
deplores the defeatism — the appeasement attitude taken by some of 
our so-called isolationists toward the criminal aggressions of Hitlerism 
for world domination and human enslavement. Such appeasement 
policies which proved suicidal for other countries whose people are 
now enslaved by the armed forces of Hitler and which, while it lasted, 
was almost suicidal for England, does not find favorable response in 
California. More and more are our people being awakened to the 
necessity of complete national unity — Nazi propaganda is despised. 

Any dissidence which affords it aid and comfort is regarded in.jur- 
ious to our preparedness program for the security of the Americas. 
Such manifestations of dissidence is regarded as more likely to involve 
us in a shooting war, than may reasonably be expected from complete 
national unity behind the President's forthright stand and warning 
to Hitler that any interference within American rights or danger to 
American ships will be promptly met with the only argument Hitlerism 
understands. 

California is producing a large and important part of their instru- 
mentalities of national defense and materials of war for the fighting 
against the Axis Powers in Europe and Asia, and all her industries 
are being geared with unity of purpose to the National Defense Pro- 
gram. Our proximity to America's outposts in the Pacific and our 
natural sympathy for the people of China in their handicapped struggle 
against the aggres.sions of Japan cause the developments in the Orient 
and the would-be advances of Japanese aggressions in the Pacific to be 
keenly followed here. 

We have welcomed the firm stand now taken by our national 
administration in stopping the shipments of oil and other materials 
for warfare to Japan and our all possible aid to China. This we 
believe will serve to stop the contemplated aggressions of Japan 
threatening a war in the Pacific. 



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California is also the center of the moviii<^ picture industry and 
we are glad to know that if any of their productions can be inter- 
preted by any critics as propaganda it is not Nazi propaganda but 
responds to the true sentiment of the American people for national 
unity in our national defense effort against the encroachment of Nazism. 

Our agricultural and manufacturing industries are coordinating 
their activities to meet the directions of the Office of Production 
Management in striving to reach the maximum production of which 
California with its vast resources are capable. 

Our labor conditions are being improved until strikes are now 
few and far between — with no question arising as to the loyalty of 
labor. 

Our State Council for Civiliaii Defense is functioning in accord- 
ance with directions of the National Civil Defense and hourly, under it, 
our local Defense Councils are being organized in every locality for 
complete preparedness for home and civil defense. 

In other words, California intends to be ready for any emergenej' 
which the natural destiny and the natural world leadership of this, 
the greatest Nation in the world, may lead us. 



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313 



INDUSTRIAL ORGANIZATION FOR DEFENSE 

Address at luncheon conference held at Sacramento, October 6, 19 41, for the 
purpose of organizing California's industrial plants 
for defense production 



Distinguished Guests, Ladies and Gentlemen, Manufacturers, 
Farmers, Workers of California 

In the language of the President of the United States, our Nation 
is to be the arsenal of democracy in the present struggle for freedom 
from aggressions and world domination by the Nazi and Fascist Axis 
Powers. In addition to providing for naval and military protection 
against the invasion of America and American rights on the high seas, 
the President and the Congress, through the passage of the Lease-Lend 
Act (adopted as an expression of the will of the American people),, 
have dedicated the resources of the United States — manpower, material 
and productive capacity — to the cause of aiding the nations of the world 
now resisting these forces of aggression. This settled policy of our 
Government places upon every citizen the obligation to make his maxi- 
mum contribution to this great national effort as a worker, as an 
employer of labor, as the owner or manager of productive facilities, or 
as a citizen, a consumer and a taxpayer. This critical hour in the 
history of our Nation calls for more than just additional effort, and it 
requires that every industry, every corporation, every citizen shall 
loyally, patriotically, cooperatively and unselfishly do its and his utmost 
to accomplish speedy all-out, maximum production. It definitely and 
distinctly means that anyone actuated by a purpose to grab all the 
profits out of this war economy that he can lay his hands upon, regard- 
less of the rights and needs of others or the creation of bottlenecks in the 
stream of production, can not be considered a loyal American. 

Only a few short months ago the Government and the people of 
the United States called upon industry and labor to produce at an 
unprecedented rate the instruments of war. It is not an easy task 
within the space of a few months to convert an industrial peace-time 
economy to an integrated industrial structure turning out materials of 
war. There have been difficulties of many kinds, dislocations which 
have not been easy to adjust, but on the whole the record shows that 
American industry and American labor have responded magnificently 
to this demand. In a sense, the first phase of this industrial effort is 
over and we have succeeded in gearing a large part of our industrial 
machine to defense production. Now we are entering what might be 
considered the .second phase of this industrial conversion. 

It is natural that when the procurement officers of the armed forces 
and the Office of Production Management were obliged to enter the 
industrial market and place contracts for huge orders of war materials, 
they turned to the great industrial establishments which could more 
easily expand plant capacity and redirect their productive effort to 
these new demands. The effect of this natural, logical step has been 
to concentrate in the hands of relatively few large industrial organiza- 

21—18527 



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STATE PAPERS AND PUBLIC ADDRESSES 



tions the great bulk of defense contracts. During the stress of these 
first months, because no man could measure how rapidly the demand for 
production would increase, very few people foresaw the consequences 
which would flow from this concentration of defense contracts. 

If we had an adequate supply of materials to meet the demands 
both of the defense effort and increasing pressure for consumer goods, 
the consequences of this policy would liave been less severe. We have 
learned, however, that the needs of defense can be met only by sacri- 
ficing all but the essential requirements of our civilian population. 
And we have learned that the life of thousands of our peace-time indus- 
tries, deprived of their normal activities for defense purposes, can only 
be saved by their participation in the production of defense materials. 
We have also learned that the time element and preservation of our 
Democracy require spreading of the production of materials and 
instrumentalities of defense so as to employ all usable plant capacities, 
large and small; that subcontracting and prime contracting must be 
extended in every possible direction. While consumer demands must 
take second place to the requirements of the emergency, we hope and 
believe this policy can and will be administered in such a way as to 
continue to make available to the consuming population all essential 
needs not inconsistent with the national defense and at prices fair and 
honest to producer and consumer, controlled against profiteering and 
inflation. 

And speaking of prices, I take the position that costs to the govern- 
ment of defense materials should be held to the minimum; that no 
producer, no contractor should be required to produce at a loss, but no 
worker should be required to accept inadequate pay ; nor should any 
contractor be permitted a profit on cost-plus contracts in excess of the 
normal banking rate for the use of his capital, owned or borrowed. 

Because we do not have enough raw materials to supply all of the 
demand, it has been necessary to institute a system of jiriorities where 
the producers and distributors of raw materials are required to make 
them available first for defense production. This has meant increas- 
ingly that industrial plants not working on defense orders get only 
what is left, and less and less of these raw materials are reaching non- 
defense plants. 

There are thousands of small industries in this State which do not 
have a defen.se contract. Surveys made by the California State Council 
of Defense and other agencies indicate that a great majority of these 
small industries have tried unsuccessfully to secure defense work. 
These plants now find themselves confronted by a dilemma. They can 
not get a defense contract. Letters we have received from scores of 
such plants indicate that unless some drastic steps are taken to correct 
this situation they will be obliged to close their doors within the next 
few months. 

It is to contribute to a solution of this critical problem that the 
State Council of Defense is cooperating with the Office of Production 
Management and prevent the elimination of the thousands of small 
manufacturing establishments which are a vital part of our normal 
industrial econom^^ While it is true that these plants are small, in 
the aggregate they are the larger part of American industry employing 
the greater part of American labor. The effect of their closing would 



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315 



be the displacement of thousands of workers. Their elimination would 
add to the difficulties of industrial reorganization in the post-war 
period. If we can find the way to bring these plants into the defense 
efforts, these serious consequences may be avoided. 

Under the auspices of the Office of Production Management, the 
Army and Navy procurement offices and our State Council of Defense, 
industrial and agricultural clinics are to held in Los Angeles 
and San Francisco about the middle of November. Exact dates will 
be announced later. The industrial clinic is for the purpose of calling 
together all prime contractors, subcontractors and potential producers 
of defense materials, prepared to present information as to their plant 
production utilities and capacities, to analyze this information and the 
results of all reliable research and survej's of all industrial production 
plants capable of being geared to the manufacture of such materials, 
to consider ways and means of spreading the government expenditures 
to employ such plants, and in general to engage in a cooperative effort 
to meet the problems to which T have referred. The agricultural clinic 
will analyze the requirements for California's agricultural production 
in meeting local consumer demands and in supplying those agricultural 
products which may be purchased for delivery to England, Russia and 
China; to direct the course and diversity of the production of Cali- 
fornia 's agriculture so as to meet and fit into these anticipated require- 
ments. This, for the purpose of bringing into employment and par- 
ticipation in our agricultural output all of our farmers and agricultural 
resources. 

It is our purpose to aid the national program in a real constructive 
and effective manner, acting entirely under the authority of the Office 
of Production Management. Mr. Floyd B. Odium (Executive Director 
of the New Contract Distribution Division of 0PM) advises me that 
he will personally attend this industrial clinic and bring to them the 
plans and exhibits of that office. Qualified experts from the agricul- 
tural production management will attend the agricultural clinic, pre- 
pared to direct and advise in the work and plans for accomplishing 
its purpose. 

In this undertaking the Office of Production Management, the 
Army and Navy procurement offices, and the California State Council 
of Defense expect and should receive the full cooperation of industry, 
large and small, of labor, of finance, and of a citizenry rededicated to 
the preservation of American ideals of liberty and justice. The State 
extends to all concerned an invitation to participate in our State 
industrial and agricultural clinics; more specific information with 
regard to which Avill be duly publicized and made available from the 
office of the State Council of Defense at Sacramento. 



316 



STATE PAPERS AND PUBLIC ADDRESSES 



AIRPLANE PLANT DEDICATION 

Remarks at ceremonies at new Douglas Plant, Long Beach, 
October 17, 1941 

Today southern California saw tlie formal dedication of a defense 
production plant. This wa?? no ordinary dedication of a completed 
buildinpr, but of a monument to the profrress of aviation and an 
important and significant unit in our Nation's preparedness for 
defense proj^ram. 

Dedication of the completion of this vast Douglas "blackout" 
plant to the cause of national defense broufrht to ray mind a conver- 
sation I had over a year ajro with the pioneer of California's preat 
and f^rowingr aircraft industry. It was at a meetinp: called by me to 
orp:anize California's State Council of Defense that I talked with 
Donald Doujjlas about the humble bepinninnr of that industry and its 
marvelous accomplishments in the few dramatic years of its life; also 
of the great responsibilities for our national security devolving upon 
that industry. This personable, unassuming man, whose engineering 
genius and courage have contributed so much to California's leader- 
ship in the procrress of the airplane industry, made a deep impression 
upon me. I did not find in him a personality of the acquisitive, selfish 
type, wholly concerned in the profit side of his business, but one with 
a sense of professional pride in scientific achievement for the industrial 
and economic progress of his country — the further conquering by man 
of and putting to man 's beneficial Tise the elements and resources of 
nature. It was with great admiration for him that I listened to 
Mr. Douglas say to me that he deplored the necessity of converting 
the eneriries of this civilizing industry into the production of instru- 
mentalities for human destruction; that this is all contrary to his 
ideals and ambitions with respect to the growth of that industry, but 
that .since national security and the cause of civilization itself requires 
it. the aircraft industry will proceed to produce all that the cause of 
national security and freedom demands, and. he hoped, with products 
superior to any produced elsewhere in the world. Tn other words, the 
pioneer of the Douglas plant dedicated today, feels as we all feel that 
we are not a M'ar-like Nation, not an imperialist Nation; we have no 
purpose of aggression or subjugation of any other country or its 
people. Our hi.story bears this out. We would avoid war or the 
preparation for Avar unless it is forced upon us; unless our national 
security and that of the western hemisphere is endangered or the 
principles of democratic government and institutions are threatened 
with destruction. Then we must turn from our peace time efforts to 
make American democracy work as a classic example of progress in 
the American way of freedom and self-government, prepare to effec- 
tively defend our security and give aid and support to other peoples 
fighting for the same principles again.st their subjugation by the war 
machines of outlaw aggressor powers. Tliis we are now doing, and 
to this cause we are celebrating the dedication of an important plant. 
In this celebration it is proper that we pay tribute not only to the 



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317 



founders and the engineering genius that have built the Douglas 
plant to its present outstanding growth, but to all of the workmen who 
constitute the brain, the brawn, the skill and the loyalty that have 
made that growi;h possible. Already bombers and fighting planes of 
California's aircraft industry are reaching the English, the Russian 
and the Chinese fronts in their fight against Hitler's Axis Powers, but 
America's production of the things needed to defeat Hitlerism has 
just begun in the couA'ersion of our peace time economy to a prepared- 
ness for war economy. We have a long way to go in reaching the 
peak of national production of which our great natural resources and 
productive facilities are capable. But this will come, and when it 
does, it will be felt wherever free men are fighting for their freedom 
from military enslavement. It will be exhibited on all the fronts and 
outposts of the Americas, and it will spell the permanent defeat of 
all of the military forces of the Axis Powers, the restoration of world 
peace, and the leadership of this the greatest Nation in the world in 
the establishment and enforcement of world peace in accordance with 
the principles and objectives set forth in the historic declaration of 
President Roosevelt and Winston Churchill at their meeting on the 
Atlantic. The time within which that reversal of today's direful 
world situation is achieved depends not only upon the facility and 
dispatch of the work of this great industry and all other productive 
industries of America, but upon the unity of the American people in 
support of their government's international policies. That unity has 
not yet been wholly achieved, but more and more it is being achieved 
as the days go by, and the soundness, foresight and principles of those 
policies are becoming more and more manifest to all of our people. 
Here in California I feel safe in saying that we are overwhelmingly 
supporting our government's international policies and all of the 
preparedness programs for defense that are given us to perform. 
Our State Government is gearing its activities to coordinate with that 
program and with "all out" production of the things required by it. 
We are cooperating thoroughly with every agency of ^ the Federal 
Government to facilitate and speed up the work of the defense indus- 
tries and also to maintain an internal balanced economy and a morale 
of the civil population that will give every support and inspiration 
for greater achievement to all of the forces employed to guarantee our 
national security and our aid to those who are serving it abroad. 
The performances of the Douglas plant, the completion of the unit 
dedicated today, is one example of California's progress for its coun- 
try's defense and general welfare. 



318 



STATE PAPERS AND PUBLIC ADDRESSES 



GRAND NATIONAL LIVE STOCK EXPOSITION 

Address before San Francisco Advertising Chcb, 
October 29, 1941 

Mr. Chairman, Diatingnished Guests 
Ladies and Gentlemen 

My pleasure at bein*; with you today is immeasurably heightened 
by the knowledp:e that I am participatinfr in another event of deepest 
significance to our State and to the West. 

This luncheon, in a sense, may be considered to be the dedication 
of a new institution * * * an institution of unlimited potentiality 
for service to California and its nei<rhborine States of the Pacific Coast 
and Rocky Mountains * * * the Grand National Live Stock Exposi- 
tion to be held here in San Francisco from November 15th to 22d. 

Possibly, as advertising men and women, normally occupied with 
other matters, the relation of the Orand National Live Stock Exposi- 
tion to yourselves may have appeared somewhat remote. 

However, your presence here thi.s afternoon — and, I might add, 
the commendable and very profitable curiosity which seems to typify 
the men and women of the advertising profession — reflects a healthy 
interest on this point, and a willingness to learn. So perhaps we even 
can study the matter together. 

I know that none of you is unaware of the tremendous importance 
of agriculture in our scheme of western economy. 

I know that each of you is vitally conscioas of the debt which all 
of us here in the modern West owe to its agricultural and other primary 
industries. 

I think all of us realize that our whole edifice of business, finance 
and trade is erected upon a foundation of primary industries • * * 
agriculture, manufacturing, mining, lumbering, fishing, and the others. 

More than any other section of this great country, we in the West 
are creatures of the soil * * * from it we have derived our strength, 
the essence of our greatness, and from it we shall continue to gain 
the elements of our future growth. For here in California, with all of 
our tremendous variety of natural and cultivated wealth — the forests, 
the oil wells, the mines, the factories, the moving pictures — our No. 1 
industry is still * * * agriculture ! 

Yes, farming is still California's biggest business * * * still 
the principal means of livelihood for the 7.000,000 people who live here. 

And of this great, No. 1 industry, live stock and dairy activities 
provide the principal source of our State's cash farm income! 

Perhaps I can convey a more graphic representation of the vast 
scale of California's agricultural industry — and particularly the divi- 
sion of live stock and dairy production — by pointing out that in 
1940 — last year — orchards, farms and ranges of this State produced 
more than $628,500,000 in agricultural income — and that something 
like 34 per cent of this total, of $216,000,000, came from live stock and 
dairy operations alone. 



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319 



Now what is true in California with respect to live stock is true in 
the other Western States * * * indeed, to perhaps an even greater 
degree. For live stock operations over the eleven Western States as a 
whole account for approximately 50 per cent of all farm income * * * 
and these eleven Western States produce something like 70 per cent of 
all live stock raised in the United States. 

Yes, despite the stagpcering implications of these totals, the cry 
today is for more and more live stock and dairy products * * * 
the cardinal point in Secretary of Agriculture Wickard's Program of 
National Defense husbandry is the production of greater quantities 
of milk and dairy products, beef, pork and lamb. 

These are the sinews of national defense, just as truly as are 
tanks, rifles, bayonets and "jeeps." God forbid that we find ourselves 
in a shooting war, but it is only a blind man wlio fails to see the dangers 
in his path and neglects to arm himself against them. The production 
of food is as essential to the arming of America as the building of ships 
and planes. The man who sows the field and herds the flocks is every 
whit the patriot and defender of his Nation that is the man who toils 
in the shipyard or aircraft plant, or drills with bayonet. 

The injunction to produce more food — and the kind of food which 
an arming nation must have if it is to be strong— must be obeyed. 
Our farmers must produce more cattle, more swine, more sheep. 

Now where in this picture does the Grand National Live Stock 
Exposition fit ? 

I believe most of you see just where it fits. But the picture is 
well worth looking at very carefully. 

First of all, how many of you here today realize, that contrary to 
popular belief, California does not begin to produce enough live stock 
and dairy products to sati.sfy its own needs, even in normal times? 

That's a fact. California is an importing State, in so far as live 
stock and dairy products are concerned. An importing State, in the 
face^ of the fact that 80 per cent of our tremendous acreage of land 
in California is suitable only for the production of live stock, and that 
climatic conditions in this State are ideal for lite stock breeding and 
operations ! 

California produces only 75 per cent of the dairy products it con- 
sumes—only 65 per cent of the beef we eat, and, when it comes to pork, 
Jess than 40 per cent of what we need ! 

At the same time, we continue to produce tremendous specialty 
crops, for which we find progressively restricted markets as the years 
go by. I dare say there are few of you here today who are not familiar 
with the sight of uprooted fruit or nut trees, wasted fields— evidence 
of deliberate destruction of bearing crops because they no longer can 
be raised and sold at a profit. 

I think the conclusion is obvious. 

We ought to quit producing surpluses of crops which are hopeless, 
and turn to the production of those things for which there is a demand. 

Naturally, I don't mean by that to advocate a complete abandon- 
ment of our farmers of citrus and deciduous fruits, nuts and field and 
truck crops in favor of dairy and live stock production. In all these 
adjustments, there is a balance of forces which prevents excesses and 
extremes. 



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STATE PAPERS AND PUBLIC ADDRESSES 



But I must seriously commend to the agricultural population of 
our State the consideration of the factors I have briefly outlined, 
and the possibility of an improved economic situation based upon a 
reeogrnition of the actual demand. 

Thougrhtful afrricultural leaders have loupr advocated the diversifi- 
cation of crops, particularly greater devotion of effort to live stock 
and dairy production. I think the time has come for our farm people 
to pay heed to such advice. Every circumstance of economic demand 
today points to an ascendent live stock and dairy industry for many 
years to come. 

In suggestinw the possibilities -wliifli live stock and dairy produc- 
tion offers the California and Western farmer today. I am well aware 
that a most important condition attaches itself thereto — the condition 
of quality. 

After all, there are cows and cows, sheep and sheep * * * pigs 
and pigs * * * good ones and bad ones. "We only want the good ones. 

It is a simple but seeniingly widely overlooked fact that it requires 
no more land and no more feed to raise a good animal than a poor one. 

Yet the good animal brings a substantially good profit, while the 
poor animal means either little or no profit at all — or^ perhaps a loss. 

I said "seemingly widely overlooked fact" because actually many 
of our farmers are anxious to improve the quality of their stock but 
can not do so. Why can't they? 

The answer to that question lies in the fact that comparatively 
few of our farmers and live stock producers here in California are able 
to travel to the live stock market centers to obtain the blooded stock 
needed to improve their herds. 

The quest for good quality animals is an arduous one. The average 
farmer, busy with his crops and daily fhores, has neither the time nor 
means to go roaming about the countryside in search of the kind of 
animal he wants. 

Then what can he do ? 

It isn't so much what he can do — it is what can we do for him. 
We can bring him what he needs to a centrally located, convenient 
market place — a market place close to his farm, yet one where he can 
obtain the best of what he wants. 

Such will be the Grand National Live Stock Exposition. 

The Grand National comes at a singularly appropriate time. 

It comes at a time when the leaders of our country are voicing a 
compelling plea for greatly accelerated production of quality live stock 
and dairy products. 

It comes at a time when the live stock producers of California and 
the Western States are keenly conscious of the need for increased 
animal production and the opportunities awaiting them .by reason of 
such production. 

And it comes at a time when it will afford western live stock pro- 
ducers an unprecedented array of the Nation's best beef and dairy 
cattle, horses, sheep and swine, from which they may select animals for 
the upbuilding of their own herds and the creation of great new blood 
lines — blood lines which, I might add, by reason of the ruthless slaugh- 
ter of domestic live stock in the hapless nations of Europe, will in 
great measure supply the world with its seed stock in the future. 



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In this time of challenge and opportunity, it is fitting that the 
plans and striving of eight years reach fruition in the completion of 
the great "Cow Palace" and its dedication to a public service, the 
importance of which can not be exaggerated. 

I believe that I can be pardoned a sense of pride in the fact that 
this great undertaking has been realized during my administration, and 
that the officials of your State Government, during the past three years, 
have lent every possible aid to the successful culmination of plans for 
the first annual Grand National Live Stock Exposition in 1941. 

The Grand National, as you know, is a State project. The No. 1-A 
Di.strict Agricultural Association, its sponsor and the builder of the 
"Cow Palace," is a State agency, comprising the counties of San Mateo 
and San Francisco. The State of California has invested hundreds of 
thousands of dollars in the project, together with those two counties, 
the City of San Francisco and the Federal Government. Like them, 
the State of California has made this investment because of a profound 
belief in the tremendous mis.sion the Grand National and the "Cow 
Palace" will accomplish. 

This great building, the finest Wve stock pavilion in the world, 
with upwards of 12.000 seats in an auditorium without pillar or post, is 
to be dedicated on November 15th. 

With that dedication, there ^vill begin a new era in the develop- 
ment of California and western live stock and dairy history — an era 
which we have every reason to believe will mean new prosperity to 
and new service by western agriculture. 

It is this service to which the "Cow Palace" and the Grand 
National Live Stock Exposition are dedicated — to the improvement of 
western live stock, to the prosperity of western agriculture, and to the 
production of those foodstuffs our country so desperately needs for its 
task of preparedness. 

The success of the Grand National is of vital importance to Cali- 
fornia—to San FVancisco — to the entire west. 

Live stock shows of the scope of the Grand National — which you 
may not realize, will be one of the three or four biggest events of its 
kind in the world — are somethin£r new to California. Therefore, mapy 
of us may not recognize its tremendous importance. 

I was interested, reading a copy of a Salt Lake City newspaper 
the other day, to come across a statement bv Mr. George S. Eccles, 
president of the Ogden, Utah, Live Stock Show, in which he declared 
that in the 22 years in which that show has been held, quality of live 
stock in the contributing area has been improved several thousand per 
cent ! 

And Mr. Harold DePue, the new manager of our own Grand 
National, tells us that his North Montana State Fair, in ten years of 
operation, improved the quality and production of Montana and "Rocky 
Mountains live stock several hundred per cent. 

In other words, these live stock expositions are not merely shows- — 
they accomplish definite results of tremendous benefits. 

And to those of you who may be inclined to puzzle over the relation 
of live stock to your own particular pursuits, let me cite one further 
example — business men in Denver and Portland inform us that the 



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STATE PAPERS AND PUBLIC ADDRESSES 



weeks in which their annual live stock shows are staged bring more 
business into their stores than Christmas Week! 

Before I close, I want to congratulate San Francisco, and the San 
Francisco Advertising Club, upon its enthusiastic support of the "Cow 
Palace" project and the Grand National Live Stock Exposition. 

As my friend, Mayor Angelo Rossi will testify, I have not always 
described San Francisco 's support of rural activities in terms of charity. 

But certainly in its relation to this great project, in its enthu.siastic 
championsliip of the Grand National, San Francisco is entitled to the 
gratitude of California and the Western Hemisphere and deserving of 
her boast of being agriculture's "Friendly Neighbor." 

San Francisco is the logical place for the Grand National. Its 
natural advantages — geographical location — make it the logical export 
and service center for the great live stock and dairy industry of the 
west. Together with San Mateo County, San Francisco is to be hon- 
ored for progressive thinking and in appreciation of the problems of its 
rural neighbors, and its resolution to turn to and lend a hand to their 
solution. 

And so, witli every wish for a successful Grand National, and the 
hope that this splendid demonstration of community support evidenced 
here today may be continued, in the future, I bring you the greetings 
of the people of California and the assurance of their support in this 
great enterprise. 

Good luck and thank you. 



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323 



ARMISTICE DAY— 1941 

Remarks at public ceremonies, Los Angeles Coliseum, 
November 11, 1941 

We have just finished celebrating the Armistice, preliminary to 
the peace which American arms made possible in what history records 
as the first world war. We were drawn into that war in the cause of 
freedom and democracy. Our purpose was to bring- about a peace on 
a firm foundation of international cooperation which would prevent 
further war. We won that war, but unfortunately we and the peoples 
of the rest of the world failed to win the peace predicated on that 
armistice. Because of that failure we are in the midst of and may 
inevitably be drawn into a second world war, more far-reaching' and 
more destructive in its consequences than the war which Armistice 
Day, November 11, 1918, brought to an end. Now, more obviously 
than then, the success of aggressor nations, led by mad dictators, 
intent upon conquering the world, is our own national security, as 
well as freedom and democracy everywhere, threatened with destruc- 
tion. Against this we are preparing to defend, with all of the strength 
of the great resources and productive capacities of our country. That 
we shall succeed in that defense, there can be no doubt. Whether 
drawn into actual warfare in a battle of the Atlantic or in the Pacific, 
or both, we shall emerge in the traditional American pattern which 
means victory. Whatever disunity may be voiced among Americans 
with regard to the strategic course that we should follow for our own 
defense and for the protection of American rights in this terrible 
emergency, we know that when final decisions are made and our 
course is set and determined through the processes of our democracy, 
there shall be unity in following through to a successful issue. To 
keep the war away from our shores, to confine it to the eastern hemis- 
phere, where it began, and as the surest means of preventing the 
necessity of ever sending another American expeditionary force tp 
the continent of Europe, the President and the Congress of the United 
States, responding to the will of the people, have provided for fur- 
nishing "all out" material aid to the nations there fighting these 
aggressors. This aid may enable our natural allies to impose another 
armistice based upon the defeat of these would-be conquerors of the 
world. 

Yet we realize that America may become further involved before 
that new armistice shall occur. 

Whatever may be the road to another world peace, that peace 
will also fail unless America .joins in preserving and enforcing it in 
accordance with the peace objectives of all peoples struggling for 
freedom from aggression and tyranny. To win such a peace, America 
can never consider itself an isolationist Nation, but must wholeheart 
edly enter into an association of all nations of the civilized world for 
the enforcement of peace and justice, the protection of human rights, 
and the supplying of human needs. To that end America must, as the 
greatest nation on earth, respond to the call for its leadership, which 
comes from the hearts of humanity. 



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THANKSGIVING DAY— 1941 

Address over California Radio System, 
November 19, 1941 

My Fellow Citizens 

Tomorrow we celebrate the first and the most American of all 
festivals. In celebratinj^ Thanks^ivinjx we do far more than give 
thanks for onr material blessinprs ; far more than give thanks for moral 
and spiritual welfare; more, even, than for national safety. "We do 
honor to the spirit which, perhaps more than any other one factor, 
makes America the world's great symbol of hope. I refer to the spirit 
of freedom. 

In celebrating Thanksgiving, we celebrate the first American 
harvest of corn, potatoes, pumpkins, turnips, acorns and nuts gar- 
nered by those hardy Puritan men and women who, in the bleak fall 
of 1620, landed at Plymouth Rock. We do honor to dauntless men 
and women who were so determined to win freedom to worship God 
according to their own lights that they severed the ties of family and 
livelihood in the mother country and embarked upon one of man's 
truly epic, truly great pilgrimages; pilgrimage to a new and unex- 
plored world — now our world — here to settle in a wilderness. To win 
freedom, they stood ready to face, aiul they actually did encounter 
and overcome, hardship and terror and hunger almost to decimation. 

They won the freedom they sought ; freedom of worship for them- 
selves. It was a narrow freedom, however, inasmuch as they did not 
accord a like freedom to followers of other creeds. That came later. 

But, in winning this seemingly limited freedom, they established 
the pattern of American life and living; yes, even of American Gov- 
ernment as we know it today. 

Because, looking back, we must realize that each succeeding step 
in our great national march of progress, since that day more than 300 
years ago, has added to the extent, the quality, and the strength of 
freedom ; freedom for Americans in actuality, and the example of 
freedom for all the Avorld. 

The Revolutionary War won us independence — independence of 
foreign rule and the right of self government as later embodied in the 
United States Constitution. 

The War of 1812 established freedom of the seas, not only for 
Britain but for America, and thereby for all nations. 

The war between the States extended freedom to men of all races, 
thus giving substance and reality to the slogan "* * • the land 
of the free * * *" in our national anthem. 

The Spanish-American Avar was America's declaration of freedom 
for men throughout the new western world. 

And our participation in World AVar No. 1 was America's pledge, 
America's commitment to democracy, and government of, by and for 
the people. 



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But America's wars have not been our only paths to freedom. 
"We have won many of our most important accessions to freedom by 
wholly peaceful means. 

The Monroe Doctrine, announced in a period of peace, although 
a rather tense one, was America's Declaration of Western Hemisphere 
Independence; a declaration that Europe's age-old quarrels and 
jealousies must not be transferred to the soil of the Americas. 

The application of science and inventive genius to our natural 
resources and physical processes; the application of power — the power 
of the steam engine, the internal combustion engine, and electricity — 
to agriculture, transportation, communication and manufacture; all 
of these, by wholly peaceful means, have brought the promise of 
emancipation of men and women from sodden drudgery. They have 
given us the means to comfort and even plenty, and laid open to us 
new avenues to freedom for leisure, culture, improvement of the mind, 
and enjoyment of the arts. 

Pursuit of freedom has lifted the art of healing out of the cate- 
gory of soothsaying and sorcery into the field of science, and made it 
man's most beneficent profession, giving him the hope of freedom 
from the awful scourges of disease and malnutrition which have 
marked all past history. 

The list of peaceful accessions to freedom must also include the 
many improvements we have woven into the social fabric. These are 
typified by the abolishment of child labor, universal suffrage, the 
establishment of minimum wages, workmen's compensation insurance, 
unemployment insurance, taxation according to ability to pay, collec- 
tive bargaining in industry, old-age pensions, and the extension of t\ie 
principles of social security on all fronts. 

All of these came only after sharp struggles, but these struggles, 
for the most part, were carried on at the parliamentary level, with 
almo.st no casualties except the political ca.sualties among those who 
failed to understand, and therefore tried to oppose, man's drive to 
achieve freedom. And, indeed, many of these social improvements 
are so very recent that some men still are unable to appreciate their 
beneficence ; still unable to accept as necessities improvements which 
they regard as luxuries and, therefore, subversive of public morals and 
good government. I believe, however, that most of us approve these 
improvements as necessities. And if, indeed, they are luxuries, they 
are luxuries which most people believe we can well afford now that 
we have discovered our enormous capacities to produce all of the 
material essentials of secure and comfortable living. 

The Puritan fathers came seeking freedom — freedom of worship. 
But they knew there could be no freedom of worship unless they had 
an assured food supply. This required their hard labor on the soil 
and in the forests. And, when they gathered in the first fruits of 
their labors, they were more than ready to give most fervent thanks 
for nature's bounties so well earned. 

We of today similarly observe this traditional occasion for 
Thanksgiving. Despite the ease with which we draw food from the 
soil and convert our natural resources into comforts, it is good for us 
to be reminded that, after all, we live very close to nature, very close 



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to the soil. It is well that we remember the roots and the nature and 
the soiirees of productivity as the foundation of living. 

No matter how great our wealth, no matter how complete our 
mastery of the forces of nature, even in Utopia man shall have to 
work for his living. This should teach us that the object of social 
organization and government should be, not that of creating or 
enlarging the groups of men free from the necessity of work, but that 
of assuring men that their work shall be rewarded in terms of comfort, 
culture and security. 

There is another very valuable and salutary lesson that we can 
draw from the American institution of Thanksgiving and its origins. 
TVTiile the Puritan fathers came seeking freedom of woi-ship, they knew 
there could be no such freedom unless they were free from attack by 
other tribes of men. They knew they could not ignore or live apart 
from their neighbors. Hence, when they gathered in their first crops, 
they shared nature's bounty with their Indian neighbors who came 
to partake of their Thanksgiving feast. They did this, not merely to 
repay the Indians for the food that had carried them through the 
previous winter and spring, but in order to cement the only possible 
relationship under which they could be safe from attack. 

The lesson to us today is obvious. "We can no more live in isola- 
tion from oxir neighbors; we can no more ignore their behavior than 
could the men and women of the Massachusetts colony 300 years ago. 

I believe I observe, among the American people, a rising recog- 
nition of the truth and validity of this lesson. And for this, I believe 
we should give special thanks at this Thanksgiving season, because 
recognition of the fact that we can not cut ourselves off and live 
apai't from the rest of the world is a prerequisite to national safety. 

We are a democratically inclined people. We believe in a live- 
and-let-live policy. We discipline oxirsolves. we subject our behavior 
to considerations of law and moral responsibility. But we live in a 
world beset by super gangsters who deny democracy and all its. 
teachings and benefits. We live in a world beset by gangsters intent 
upon the destruction of democracy, gangsters intent upon world 
enslavement. 

As long as any large number of the American people believe that 
the United States can ignore these gangsters and somehow be insulated 
against their depredations by distance or circimispect behavior, we 
shall lack that complete unity which should obtain in our preparedness 
effort to defeat the forces of antidemocracy. 

But we should be thankful for the growing realization of our true 
part and place in the world of today, and that national safety lies in 
sharing our great plenty Avith our anti-Axis neighbors, thus supporting 
them in a struggle which means so much to the life of a democracy and 
world civilization, as well as to our own national security. 

For a long time we were prone to take our freedom for granted, 
feeling secure in their possession, and security in our SOO-j'ear-old 
habits of democracy. For a long time we felt only contempt for the 
Fascist dictators, and disgust at the barbarous indignities and hard- 
ships they visited upon their subject peoples. And we hoped against 



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hope that these would some day come to an end ; without our involve- 
ment. But the developments of this most awful war of all history 
have made the realization of such hopes impossible. 

Now all are giving our most fervent thanks at this Thanksgiving 
season that we are possessed of great wealth and resources, that we 
are possessed of enormous productive capacity, that we are possessed 
of genius for organization, and that we are determined to use these 
possessions to keep alive and burning the torch of freedom handed 
down to us by those sturdy Puritan men and women who celebrated 
the first Thanksgiving 320 years ago. 

With these Thanksgiving greetings I bid j-ou good night. 



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STATE PAPERS AND PUBLIC ADDRESSES 



BILL OF RIGHTS WEEK 

Remarks on B'nai Brith broadcast, Station KFWB, Hollywood, 
December 6, 1941 

My Fellow Citizens 

Next week is "National Bill of Rights Week." It culminates in 
"National Bill of Rights Day" on Monday, December 15th, which is 
the 150th anniversary of the day on which the Bill of Rights was rati- 
fied by the State of Virginia, the last State ratification necessary to press 
these rights into and make them a part — the living part — -of the Con- 
stitution. As Governor, I call upon all people of California to join in 
the Nation-wide commemoration of this truly great and significant 
event; great because it was a milestone of achievement along man's 
long road to freedom, the achievement of civilized government ; signifi- 
cant because it told the world that our forefathers had won not only 
their Revolutionary War for independence but also the peace which 
followed. 

The American Bill of Rights is a simple listing and guarantee of 
man's rights as an individual and of men's group rights. The Ameri- 
can Bill of Rights is a statement of the very spirit of America ; the spirit 
of freedom. 

History tells us the rights of many were not won easily. And the 
present world scene tells us, most positively, tliat they can not be held 
lightly. 

History tells us they were won only at the cost of wars, tears and 
sorrow throughout centuries of struggle; struggle which culminated in 
Magna Charta, wrung from King John at Runnymede in 1215 ; in the 
English Bill of Rights, granted by William and Mary following the 
English rebellions and revolution in the 17th Century; in our own 
American Constitution and Bill of Rights following the Declaration of 
Independence and a war for that independence; in the emancipation 
of man from chattel slavery, proclaimed in the midst of a bitter war 
betweeen the states. 

Thomas Jefferson told us we could not hold these rights easily ; that 
we would have to renew them in blood and struggle in each generation. 
We find full and complete proof of his wisdom in the present Avorld 
struggle. We all hope that it represents the last desperate attempt by 
despots and dictators to enslave man. 

The hope of mankind, the very essence of victory for democracy, 
in this struggle against dictatorship, consists of holding on to the rights 
guaranteed us in the American Bill of Rights. 

Hence the meaning, the intense reality, of next week's ceremonies 
observing the 150th anniversary of the Bill of Rights. Again, I ask all 
citizens throughout California to join in and share them. 

I thank you. 



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329 



CALIFORNIA AND THE WAR 

Address over Mutual Don Lee Broadcasting System and California 
Radio System, December 14, 1941 

My Fellow Citizens 

California and its people are called upon to perform a major role 
in this world war. California and its people — every man, woman and 
child — unitedly responds to the performance of that role and duty with 
enthusiastic loyalty, devotion, and a willingness to make any sacrifice it 
requires. 

With a thousand miles of coast line along the Pacific, our geo- 
graphical position places us in the first line of defense against invasion. 
Our great natural resources, our huge oil supplies, our enormous agri- 
cultural and industrial production, our numerous aircraft factories, 
shipbuilding yards, and other facilities needed to sustain our Nation 
in the winning of the war, are the natural objectives of attempted 
aggressions of our enemies. Already enemy reconnaissance, if not 
bombing, planes are known to have passed along our coast and to have 
covered a part of the interior areas. Enemy forces for invasion from 
air or sea may be hovering about us. "We know the regular Army, Navy 
and Air Forces of our country, many of which are based in California, 
will ultimately defeat such efiiorts; but we also know tliat until our 
enemies are ultimately and completely destroyed, the people and all 
the resources of California must be enlisted and marshalled for their 
own protection and for carrying on this world war against the Axis 
Powers to a successful conclusion. 

When I say that the people of California loyally and enthusiasti- 
cally respond to their duty in this crisis, I mean not only native sons 
and daughters of old American ancestry, but also every racial group, 
including Californians of Italian, German and Japanese extraction, as 
well as Californians of French, Austrian, Hungarian, Holland, Belgian, 
Czecho-Slovakian, Jugo-Slovakian, Roumanian, Bulgarian, Scandina- 
vian, Grecian and of other ancient nationalities whose people in Europe, 
Asia and Africa are now enslaved by the military power of these world 
bandits and enemies of mankind, known as the Axis Powers. All these 
groups of California's population, as well as those derived from 
Spanish, Mexican and Latin American Republics of our Western Hemi- 
sphere, of Great Britain and her Dominions, of China, of Syria, Arme- 
nia and other small nations, are united with traditional and native-born 
American citizens; all ready to do their part in the service of our 
country in this, the greatest world crisis in history. Communications 
received by me from these various groups give assurances of their loy- 
alty. It would be impossible to review them all in this broadcast, but 
as a sample of what I mean, let me quote to you, for instance, the fol- 
lowing telegram representing the sentiment of our population of Aus- 
trian extraction, expressed through representatives of the Free Aus- 
tria Movement in California. It reads in part as follows : 

22—18527 



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STATE PAPERS AND PUBLIC ADDRESSES 



"Thousands of free Austrians imprisoned or executed by 
Hitler's troops are the chief witnesses for the clear desire 
of Austrians to be separated from Germany after the victory. 
Those Austrians who enjoy the hospitality of this country 
and have been privileged to declare their intention to become 
free American citizens consider it necessary to express the 
intention of their silenced former countrymen to become free 
Austrians again. They for their part offer whatever support 
they can give and gladly accept whatever sacrifices might 
be demanded in the great struggle for a free world. They 
are sure that with the help of God and the Americans victory 
will be won." 

And as illustrative of the many assurances by the Japanese 
groups of American born Japanese citizens and Japanese residents of 
California, who number seventy thousand or more, is this telegram 
from a Japanese resident of San Mateo. It says : 

"I am Japanese, coming from Japan twenty-two years ago 
to this great country of United States of America. I have 
lived very freely under the protection of the Ujiited States 
Government and the great Flag of the Stars and Stripes over 
two decades. Now I am m.vself deeply guilty conscious that 
the Japanese navy attacked the peaceful American land with- 
out warning. They bombed and machine-gunned killing the 
Japanese people in Hawaii as well as the American people. I 
condemn the Japanese attack. It is apparently the method of 
very treacherous Hitler's butchery tactics. I am really mad 
from the bottom of my heart and determined to figlit against 
the treachery, hypocrisy, butchery, tyranny rulers of the 
Japanese navy, army and the government who are just puppet 
of Hitler's world domination. I ask yon to let me organize 
Japanese, Chinese and Filipinos in this free country to volun- 
tary arm to join abroad the Chinese army that are now fight- 
ing to defeat Hitlerite Jai)anese army on their land to .smash 
our common enemy of Fascist and to liberate our people from 
under the yoke of Hitler's slavery regime." 

Similar communications, manifesting loyalty on the part of all 
our racial groups, are pouring in. 

But we do know that our enemies have their spies ; that they have 
their carefully laid espionage plans; that they have their fifth col- 
umnists here and elsewhere in America, whether working luider the 
direction of the German, the Japanese or the Italian secret service, 
and that, therefore, every precaution and guarding must be exer- 
cised and provided again.st the havoc and disaster which any success- 
ful sabotage might cause. As to such enemies within our midst, I 
am sure the Intelligence Service of the Army and the Navy and the 
F. B. I. of the Department of Justice, who.se duty it is to ferret them 
out, arrest and place them in concentration, will receive the aid and 
the cooperation of those of our loyal racial groups who are in an 
advantageous position to aid these authorities in detecting such 
enemies. All information leading to the apprehension of such enemies 



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331 



should be communicated to the offices of the P. B. I. immediately, and 
I call on all loyal citizens and residents of California to perform that 
duty. 

We are in a serious emergency; greater emergency than any that 
we have ever faced. I am issuing a proclamation declaring a state 
of emergency in California, in order that our plans for the performance 
of California's war duty, its home defense, its police, fire and State 
Guard protection, its health, welfare and consumer protection, its 
transportation, housing, works and facility needs and their protection, 
and for marshalling of our industrial resources and production, our 
agricultural resources and production, and our human resources and 
skills, may be readily, effectively and efficiently carried into action. 
That proclamation reads as follows : 

During the long and grim struggle which we undoubtedly face, 
with its hazards and required sacrifices, our people must be protected 
as well as directed in their work in civilian life discipline, in the main- 
tenance of a morale of enthusiastic cooperation and in the perform- 
ance of all of our responsibilities from fireside to firing line. The 
responsibility for this protection rests upon the people's duly con- 
stituted State and local governments, with such emergency aid as they 
may call into service. Your State government is organized and pre- 
pared for that responsibility on its part. 

As early as June 24, 1940, in anticipation of the need for pre- 
paredness for California's part in the National Defense Program, 
and for the emergency of war into which we were actually drawn last 
Sunday by Japanese invasion, I appointed a State Council of Defense, 
representative of industry, labor. State and local governmental agencies, 
veterans organizations, education and health and welfare agencies, 
for the purpose of planning a program for home and civilian defense. 
At that time it was difficult for us all to believe that we would now 
be in actual war. There was no legislation then providing for a Cali- 
fornia State Council of Defense, and none was enacted until a year 
later. However, the original Council, so appointed and organized, 
laid the plans for State defense and civilian protection, cooperated 
with the Council of National Defense in setting up patterns for the. 
States to follow in the organization of State agencies for home and 
civilian defense, and began organization work in accordance with such 
plans. 

The Legislature recognized the need for the establishment of the 
State Council and local councils in accordance with such plans, and on 
May 30, 1941, enacted a measure providing for the establishment of the 
California State Council of Defense "In order better to provide for the 
participation of this State and its local units of government in the 
National Defense Program * * * under the direction of the Gover- 
nor as the executive head of this State" and "to provide State and 
local defense councils for the integration of all governmental programs 
for defense, for the adjustments necessary to effect a prompt assimila- 
tion of such programs, and for the proper coordination between the 
activities of government and the private agencies cooperating in the 
defense effort." 

The members of the State Council of Defense, set up under this 
act, consist of the Governor, the Adjutant General, the Attorney Gen- 



332 



STATE PAPERS AND PUBLIC ADDRESSES 



eral, the State Superintendent of Public Instruction, the Director of 
Public Health, and twenty members appointed by the Governor, who 
is ex officio Chairman of the Council. An executive committee and an 
executive secretary are provided for. The work of the Council is 
divided among its committees, whose duty it is to study and make 
recommendations of specific plans for the direction of all local govern- 
mental agencies and councils of defense in the various fields of civilian 
defense, health, welfare, transportation, housing, and production 
activities. 

On similar pattern, and in accordance with directions from the 
State Council of Defense, local councils of defense are organized under 
the authority of local county and city governments and under the 
dii'ection of the chief executives of the county and city administrations. 
Ordinances have been adopted providing for these local councils of 
defense, as recommended by the State Council. Plans have been pre- 
pared by the State Defense Council, to be followed by all local councils 
to meet civilian protection and defense requirements. Further instruc- 
tions are in course of preparation by the State Council and by the 
National Office of Civilian Defense, which are transmitted by me to the 
local councils and to the public. Naturally, considerable time is required 
in putting into effect uniform rules, regulations and detailed methods 
of procedure for the various defense activities, including the enlistment 
of voluntary services. But such uniform regulations and procedures 
are rapidlj^ being perfected until there shall be accomplished a line of 
authority from the Office of Civilian Defense of the Nation, through 
the Governor to the State Council of Defense, to the local governments 
and their councils of defense, to the volunteer organizations in every 
line of activity, as well as to the population generally, concerning each 
individual's duty in all emergencies. These uniform directions will be 
given and repeated by broadcast, by pamphlet circularization, and 
through the columns of the press until they shall became fully under- 
stood by the entire population. Continuous work to that end is now 
being performed. I will, as will the Executive Secretary of the State 
Council of Defense, communicate to the local governmental authorities 
and their defense councils, and to their volunteer auxiliary forces, and 
to the public generally, uniform regulations for carrying out details of 
plans coming from the National Office of Civilian Defense and from the 
State Council of Defense. Every citizen should be on the alert for this 
information and become fully acquainted with his duty in line of action 
in any disaster, whether from bombing or other cause that may endanger 
life or property. This does not mean that everyone should volunteer for 
State Guard dutj' or for any given line of duty, such as air raid 
wardens, fire wardens, or other police or semipolice service. Only a 
limited number can be designated for such service. But it means that 
there is a duty for everyone, including women and children, to perform 
in the home, on the streets, and in public places for his own protection 
and for the protection of his neighbors in faithfully following out 
instructions given by the duly constituted authorities in any and all 
emergencies. 

Central registration offices for all volunteers for civilian defense 
duty are being established in each locality, from which central office 
volunteers will be assigned to the division of service in which he or she 



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333 



may best serve. Volunteers for civilian service should call on their city 
and county authorities for directions to these central rejristration places. 

The orjjanization and functions of the State Guard, established 
since the National Guard was inducted into the regular Army, which is 
now being increased to 25,000 officers and men to meet requirements 
for its services, will be the subject of another broadcast by me for the 
information of all volunteers to this important service and for the 
information of the public generally. 

Let us all realize that we are all enlisted to perform our respective 
duties in the grave crisis faced by our State and Nation, whether as 
civilians, government officials, reserve Army, Navy and State Guard 
forces, or as actual combat troops. Every night let us repeat our 
allegiance to the Flag of the United States of America ; every day let us 
renew our resolution that that Flag shall remain hoisted as the beacon 
of liberty and justice for the people of all the world as we go forward 
with firm determination that we shall not only crush the Axis Powers 
and free mankind from their enslavement, but that we shall also be 
prepared to win the peace that shall follow this world war. 

Good night. 



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STATE PAPERS AND PUBLIC ADDRESSES 



RATIONING OF RUBBER TIRES 

Address over California Radio System, 
December 31, 1941 

It is my purpose to discuss with you tonight the profjram for the 
rationing: of rubber tires and tubes, wliich the Office of Price Admin- 
istration has asked your State Government to help carry out. 

Rubber is a commodity vital to the production of the material of 
war. While we have the largest stocks of rubber on hand now in the 
history of our country, still there is not enough to supply the require- 
ments for production of the planes and tanks and guns we must have, 
and for normal civilian needs as well. This need for the conservation 
of rubber is made necessary, of course, by the war in the Pacific, which 
has made much more difficult for the time being access to our normal 
sources of raw rubber in the South Pacific. 

The great bulk of the demand for rubber to supply normal civilian 
needs is to be found in the manufacture and purchase of tires and tubes 
for automobiles. Therefore, all of us, as citizens, are to be called \vpon to 
get along without all but the very minimum essential supply of tires and 
tubes absolutely necessary for the essential public services, and essential 
commercial requirements. This small sacrifice of personal convenience, 
I know, all of us are more than willing to make. 

T say I know the people of California are willing to make whatever 
sacrifice may be a.sked of them, because each day brings to my desk in 
the form of letters and telegrams and personal visits new evidence of 
how earnestly all of our people desire to have some part in winning this 
war so that peace and freedom and justice may be restored to the world. 

The cooperation of all the citizens of our State in helping to make 
this program of rubber rationing a success is only one of many ways in 
which each of us can contribute to the successful prosecution of the war, 
but it is an important one. Therefore, in order that we may have the 
broadest possible public understanding of how this program will oper- 
ate, I propose now briefly to review the machinery which is being set up 
and the manner in which it is proposed that this rationing machinery 
will operate. 

First of all, it should be made clear that only new tires, casings and 
tubes are affected by the rationing order. It does not apply to used 
tires and tubes nor to retreaded or recapped tires, or to retreading and 
recapping services. However, after January 5th no person may pur- 
chase a new tire or tube unless his vehicle is one which falls within an 
eligibility classification and unless he has a certificate from his local 
rationing board. 

Of cour.se, what everyone wants to know is : Am I going to be able 
to buy a new tire or tube when the ones which I have are worn out? 
The answer is, no, unless you are operating a vehicle in the performance 
of certain designated services which are considered to be essential to the 
continued conduct of normal community life. 



PUBLIC ADDRESSES AND RADIO TALKS— I94I 



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• While the list of classifications of vehicles which may be equipped 
with new tires is too longr to recite here in its entirety, some indication 
of the types of classifications can be given. 

For example, vehicles operated by physicians and surgeons, or as 
ambulances, or by fire departments, police departments, sanitary serv- 
ices, and public health services, may be equipped with new tires. 
Essential transportation services are also provided for, as are school 
buses and transportation for defense workers where no public transpor- 
tation facilities are readily available. 

It has also been necessary for the United States Office of Price 
Administration to give special consideration to certain types of trucks, 
such as those used for the transportation of ice or fuel, or for the con- 
struction and maintenance of public roads and public utilities. Trucks 
which are necessary to maintain production facilities, for the construc- 
tion of defense housing and military and naval establishments, and for 
the transportation of raw materials, manufactured goods and farm 
products also are to be permitted to be equipped with new tires. 

Finally, to the extent that rubber tires, casings and tubes are 
essential for their operation, farm tractors and other farm implements 
and industrial, mining and construction equipment will be taken care of. 

You will understand from these eligible classifications, the plain 
fact that we .just aren't going to get any new tires for our own personal 
use. Either we must get along with retreaded or recapped tires or find 
some other means of transportation. 

Let us consider now how this program will operate. As a legal 
proposition, the power to ration commodities is vested in the President 
by the Consress. In this instance, the rationing power has been dele- 
gated by the President to the Office of Price Administration. In turn, 
the Office of Price Administration has called upon the State and local 
government authorities to assist in carrying out the plan. As Governor 
of California and Chairman of the State Council of Defense, I have 
today appointed Paul Barksdale D'Orr, of Los Angeles, as State Rubber 
Rationing Officer, and on Friday I will announce the appointment of an 
assistant State Rationing Officer at San Francisco. They will serve 
without compensation by the State or the Nation. 

Under these circumstances, it is fortunate that months ago there 
was created and appointed as a part of the California State Council 
of Defense a committee on rubber. Avhich includes outstanding repre- 
sentatives of the rubber industry in California. We propose now to 
call upon the membership of this committee to provide the technical 
advice and information which we will need to develop an effective 
and orderly procedure under which to administer the rationing 
program. 

_ We have also called upon the cities and counties to appoint local 
rationing hoards to be composed of three members who will serve as 
volunteers. It is upon these local boards that the real burden of admin- 
istering the tire rationing program will fall. In our memoranda on 
this subject addressed to the cities and counties, it was suggested that 
cities having a population of fifty thousand or less should have one 
rationing board, unless experience proved that additional boards were 
necessary. However, in order to minimize the inconvenience to the 
public of waiting to be served by these boards, we have suggested to 



336 



STATE PAPERS AND PUBLIC ADDRESSES 



the cities havinpr popnlations in excess of fifty thnnsand that a larser 
inimber of such rationintr boards should he created for the convenience 
of the pnhlic. Many counties also will find it necessnry to create 
rationinsr hoards in order to serve the needs of the smaller populated 
centers in the nnincorporated areas of the county removed from the 
centers of population. 

We are eneourapred by the prompt and effective responses which 
the cities and counties have ^iven to our request that they act imme- 
diately to create these local rationing boards. There has been very 
little, in fact too little, time s^iven to us to set this procrram up as care- 
fully as we would have preferred to do, but it must be remembered 
that the need for rubber rationing was not anticipated before Decem- 
ber 7th. 

It is because the Federal Government and the State have been 
obligred to move so nuickly that we are so much encourafred by the 
evidences of thp willinsmess of the cities and counties to accept this 
diffifult resnonsibility. "We know, and T am sure you will realij^e. that 
durinjr the first few weeks the plan will not proceed perfectly, and 
that there will be manv mistakes made. I would ask that everyone 
be patient, helnful and understanding, and narticul'-irlv that you prive 
j'Our local rationin? boards the cooperation which they deserve as 
volunteers who are Tindertakinsr this proprram as a service to their State 
and their country. 

The detailed reculations under which your lo^al rationing board 
will operate have just been received from the Office of Price Admin- 
istration in Washinprton, and have been sent to your local Defense 
Council. The widest po.ssible publicity will be priven these reprulations 
so that you will be fully advised of the procedure which must be fol- 
lowed. In preneral, the plan is that if you believe your vehicle is among 
thase eliprible for new tires, in accordance with reprulations, and you 
desire to purchase them, you will take your vehicle to one of the author- 
ized inspection serAnces, so that the tires now on the vehicle may be 
inspected to determine the deprree of wear and whether or not it is 
absolutely necessary that they be replaced at this time. In the event 
the tire inspector aerees that new tires are nece.ssary for your vehicle, 
you will then make application to your local tire rationing board 
for a certificate. The board will determine whether your vehicle is in 
fact operated in such a way as to bring it within an eligible clas.sifica- 
tion. If the board agrees that your vehicle is eligible and has evi- 
dence that new tires are necessary, then it will issue a certificate author- 
izing new tires from your dealer, in the event the quota for the county 
or city has not been used up already. 

You realize, of course, that rationing entails more than simply 
limiting the classifications of vehicles for which new tires may be 
obtained. There is also to be a limit upon the total number of tires 
which may be sold for any purpose. This total number or "quota" 
for the State will be broken down and allocated to the cities and 
counties on the basis of registration of commercial vehicles. Therefore, 
your local rationing board must not only determine the eligibility of 
applications, but it is also limited by the quota which determines the 
total number of tires which may be sold in any month. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 94 1 



337 



We are requesting your local city and county authorities to give 
the widest possible publicity to the names of the members of the ration- 
ing boards, to the locations in which such boards will meet and be 
availalile to the public, and to the regulations as they come through in 
greater detail. 

What I have undertaken to do here is to summarize the main 
points of this tire rationing program so that you will understand why 
it is necessary and why its success depends to such a great extent 
upon public cooperation. Doubtless this is but one of many similar 
measures which may be necessary to provide our armed forces with 
the equipment they need to win this war. 

Tomorrow is the beginning of a new year, which we approach with 
a deep sense of our responsibility in meeting the perils that we face 
and the duties and sacrifices we must all make, whether as public 
officials or as individuals. We can not anticipate that it will be a 
happy new year, but we can say that it will be a year in which the 
fortitude, patriotism, loyalty and unity of the American people will 
be manifested in the performance of every call for home and for civilian 
defense, as well as for service in our Nation 's combat forces. 

In this spirit of unity and resolution to win the war, I extend 
New Year's greetings. 



PUBLIC ADDRESSES AND 
RADIO TALKS 

o 

1942 



STATE DEFENSE PROGRAM 

Radio address given over California Radio System, Jantiary 28, 1942 



Our war for victory and our civilian defense naturally require 
the closest cooperation of State Government with the Army and Navy 
commands in California. Emerg'eney requirements upsettinja: the 
normal peace time activities of the civilian population, considered 
necessary for prompt and unobstructed movement of combat troops, 
forces and supplies of the Army and the Navy, and as precautions for 
civilian safety and protection, must be adopted from time to time as 
emergency conditions and information within the knowledge of the 
Army and Navy commands and disclosed to civil authorities, justify. 
This means that much information regarding interference with normal 
civilian activities is of a secret nature, the disclosure of which would 
aid our enemies, and, therefore, can not be broadcast. 

There is no doubt that all loyal citizens of California are willing 
to suffer any inconvenience or interference with their normal lives and 
their social and recreational diversions, as well as loss of business and 
employment whenever necessary to successfully carry on the war and 
protect life and property in California. It is not unnatural, however, 
that they may sincerely believe that some restrictions or interferences 
are not so necessary, and that it is entirely consistent with all defense 
and war work that certain restrictions be removed. I am referring now 
to such restrictions as have been made upon the advice and request of 
the Western Army Command, that horse racing be abandoned, and 
that other events, such as fairs, festivals, large conventions, parades, 
tournaments, and occasions of the gathering of many thousands of 
people in one place, with the incident congestion of highways in their 
travel to and from such places. I have received numerous communica- 
tions, and copies of newspaper articles and editorials, written by some 
of our most loyal citizens, who are themselves engaged in defense work, 
questioning the need of imposing some of these restrictions, and con- 
structively suggesting that instead of their being helpful in the war 
and defense effort, they are likely to result in an undermining of public 
morale as we settle down to the somber, serious and distressing work 
of a long and bitter war. The need of the people, through the serious- 
ness and sorrow of war, for occasional diversion and relaxation as 
helpful to them in the performance of their duties, is emphasized. It 
is said that England found it necessary, in the interest of civilian 
morale, to reopen and extend football schedules, boxing matches, 
sporting tournaments, and the running of horse races, at which large 
crowds, sometimes as high as 200,000 or more, were gathered, even 
during the seasons when England was being bombed and threatened 
with invasion. In view of the fact that upon the insistence of the 
General in command of the United States Army in California, the 
Tournament of Roses and the Rosebowl Football Game on January 1st, 
and similar events scheduled for the early part of this month, were 
canceled, and Santa Anita horse racing, scheduled for this season, was 
prohibited, and many similar events have been banned, the question 



[341] 



342 



STATE PAPERS AND PUBLIC ADDRESSES 



is asked, "Must we start tliis loiifj, hard war under a blanket order 
canceling diversion and entertainment events entirely for weeks and 
even months in advance, or would it not be possible instead to establish 
a policy of canceling events on any particular day or days when in the 
opinion of military authorities such action would seem to be necessary?" 

California is known as the paradise of tourists, as well as of resi- 
dents, as a natural playground and place of diversion because of its 
exceptional climate and diversity of recreational environments. The 
conduct of recreational and entertainment events constitutes a large 
part of the business and economy of this State. Their blanket sup- 
pression, therefore, not only prevents the diversions and recreations 
which are considered important to the morale of the people, but seri- 
ously destroys many legitimate businesses and displaces from employ- 
ment thousands upon thousands of people whose living depends upon 
their employment in connection with such events. This situation, 
therefore, becomes the deep concern and requires the most serious 
consideration of the Governor and other civil authorities. 

General John L. DeWitt, Commanding General, Western Defense 
Command and Fourth Army, whom I admire as an able General, 
thoroughly sensing the great responsibility of his position and deter- 
mined in his alertness to see that the forces under his command shall 
be moved with dispatch and efficiency, and to prevent perils which they 
are constituted to guard against, I feel sure also fully considers these 
civilian upsets which result from military requirements. Yesterday I 
held a two-hour conference with General DeWitt in the Governor's 
office at Sacramento, at which I fully discussed this subject with him. 
We had before us the manj^ communications received by me from 
citizens of various parts of the State, and he had similar communica- 
tions sent directly to him, raising the questions above mentioned as to 
the necessity for comprehensive and rigid restrictions of these events. 
In this conference General DeWitt showed his appreciation of the 
seriousness of these military requirements of the civilian population 
and their effect upon business and employment. He expressed his 
desire to avoid or minimize them as much as possible, consistent with 
the prompt movement of troops and defense and war necessities. Much 
information received from General DeWitt in this conference is of a 
nature which can not be broadcast, but this much can be stated : that 
within the combat zone, which is a strip extending one hundred miles 
inland along the entire coast of California, the \ise of the highways in 
the movement of troops and materials of war is constantly required. 
Without any special events gathering tens of thousands of people 
going to and from such events and making the traffic jams incident 
thereto, normal traffic conditions interfere with the movement of troops 
and war materials. If additional interference and obstriictions by 
events are permitted causing long traffic congestions in and near the 
combat zone and its approaches, our whole war effort is obstructed and 
interfered with. Santa Anita and the Hollywood Park race tracks are 
within this combat zone, and so are many other places at which events 
are usually held, attended by hugh crowds, heavily taxing the main 
highways and arteries of traffic and transportation. As an illustra- 
tion of the interference of such events with the movement of troops 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



343 



and traffic in war materials, attention is called to the serious condition 
caused by horse racing at Tia Juana in Lower California. 

Thousands upon thousands of Californians are congesting the high- 
waj's with traffic in going to and from these races; highways, in the 
combat zone, which are needed every day in the movement of military 
forces and war supplies. I take this occasion to ask Californians dur- 
ing this emergency not to use the highways in going to and from races 
at Tia Juana. Surely all will be willing to discontinue occupying the 
highways to attend these horse races at Tia Juana when they realize 
their interference with the serious work of this total war. If this is 
not voluntarily discontinued, then steps will probably be taken by inter- 
national arrangements to prevent the crossing of the Mexican border 
for this diversion. 

Within the combat zone, restrictions against events at which 
people gather in excess of a few thousand at one time, is, according to 
General DeWitt's opinion, necessary, and such restrictions may be 
anticipated for an indefinite period. Outside the combat zone, that is 
to say, in the interior and to the eastern boundary of California, 
restrictions will not be as rigid. County fairs, festivals and similar 
events, at which as high as fifteen or twenty thousand or more people 
gather at one time, may be permitted. But in all such cases that 
largely depends upon the location of the event as it may affect troop 
movements or other military requirements at the time. It is, there- 
fore, important to have clearances for such events before completion of 
preparations for them. 

It is not only the delays and obstructions of traffic within the 
combat zone which call for such restrictions, but some events in some 
places may be banned for the protection of the people attending them 
against the pei'ils of possible plans of fifth columnist activities, sabo- 
tage, bombing, fire alarms, and other forms of terrorism and danger to 
life caused by the enemy. 

General DeWitt assures me that conditions here requiring such 
restrictions as have been or may be made, are not comparable with 
conditions in England — that the physical conditions and traffic prob- 
lems there are entirely unlike those we have here on the West Coast; 
and that lack of restrictions against the holding of races and similar 
events in England are not a tenable argument against such restrictions 
here. 

It should be known throughout California and throughout the 
Nation that the civilian and the military authorities are doing every- 
thing within their power to make it safe to be in California, and that 
such restrictions and interferences with civilian activities are taken to 
assure the safety of life in California. Surely if anyone desiring to 
come to California during the Avar period did not have confidence that 
all authorities, military and civil, were looking out and on the alert 
for the protection of the people of this State from injury, and for the 
protection of the State against invasion in any form, they would be 
least likely to feel safe in coming to California. 

It is inevitable that during adju.stments, as we settle down to the 
serious business of a long war. misunderstanding, misinformation and 
disruptions of normal activities will occur; but readju.stments and 



344 



STATE PAPERS AND PUBLIC ADDRESSES 



clearer understanding will gradually be brought about, until the mini- 
mum of disturbance and sacrifice to the diversions and businesses of 
the people incident thereto will be accomplished. 

Next Wednesday evening, at this same time, I will speak of the 
problem of dealing with our Japanese and other alien enemies in Cali- 
fornia, which I also discussed at length with General DeWitt, and 
which I am taking up with the Department of Justice of the United 
States. Today T issued a proclamation pursuant to the proclamation 
issued by President Roosevelt on January 14th, requiring all Japanese, 
Germans and Italians fourteen years of age or over, who are not 
citizens of the United States, to secure certificates of identification and 
register for identification during the period February 2d through 
February 7th, next. This is our first step in the direction of having 
all alien enemies identified and kept under surveillance. 

I thank you and bid you good night. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



345 



REGISTRATION OF ENEMY ALIENS 

Radio address given over California Radio System, February 4, 1942 

My Fellow Citizens 

With the registration and identification of alien enemies in Cali- 
fornia, which is now being accomplished and will be completed by the 
latter part of this month, plans are being considered for the disposition 
of all alien enemies in a manner that will assure protection against 
possible sabotage or fifth column activities, and at the same time protect 
all within that classification and all who are racially related to them 
from injury or unjust treatment. The classification of alien enemies 
necessarily includes all Japanese who are not now and who can not 
become American citizens, and all Italian and German residents who 
are not American citizens. These classifications necessarily include 
people who are entirely loyal to the United States, many of them being 
refugees who have escaped to this land of liberty from the tyranny, bar- 
barisms and cruelties of Axis rule in their native lands, and are ready 
to fight to their death against the Axis powers. With the registration 
and identification of all who come within the classification of alien 
enemies, it is believed that those who are of Italian or German extrac- 
tion can be also identified as to their loyalty or disloyalty much easier 
than such identification as to loyalty or disloyalty can be determined 
among the Japanese aliens and their relatives who are born American 
citizens. All Japanese people, I believe, will recognize this fact. And 
all Japanese aliens and citizens must realize that plans are absolutely 
necessary for protection against all possible enemies from within our 
borders. All loyal people within that classification should cooperate in 
the execution of such plans, and thus manifest their absolute loyalty 
regardless of incidental hardships or inconveniences. 

The fact that our immediate conflict of arms is with Japan ; the fact 
that the largest proportion of the Japanese population in the United 
States resides in California, and the difficulty which Japanese thein- 
selves recognize of determining, among Japanese aliens and citizens, 
where loyalties and disloyalties to this country exist, present a special 
defense problem in planning for the proper disposition of alien Jap- 
anese and their relatives who are American citizens. 

Immediately after the treacherous Japanese attack on Pearl Har- 
bor, which many Japanese citizens loudly condemned, I made the fol- 
lowing announcement to all loyal American citizens of Japanese ances- 
try: I quote: 

"The war against Japan places you in a most difficult situation. 
On the one hand you can so easily, and through no fault of your own, 
be made the objects of unfair discrimination or even of bodily harm by 
other over-zealous citizens who, because of their hatred of the Japanese 
Government and their distrust of Japanese in this situation, feel com- 
pelled to vent that hatred and distrust upon any Japanese racials with 
whom they come in contact. 

"On the other hand, as loyal Americans, you are anxious to give 
every support to our government in the war against Japan. And very 

23—18527 



346 



STATE PAPERS AND PUBLIC ADDRESSES 



naturally and very properly, you want your loyalty and your services 
now to be recognized and accepted for their true values. 

"As I view it, you are in position to render extraordinary and 
unique services which could not possibly be rendered by those of other 
races. You can render unique services to our military and naval intelli- 
gence departments, as well as the Federal Bureau of Investigation. You 
can help public officials in dealing with noncitizen Japanese racials. 
And you can help solve the general problem of production by working 
hard at your usual daily tasks. 

"As for those of the Japanese race who are or nvdy be disloyal to 
our country, and who may engage in sabotage or fifth column activities, 
I am reminding the citizens of California that although their help is 
wanted in apprehending such persons, their arrest, restraint and punish- 
ment are the business of the FBI and military, naval and civil authori- 
ties, and not the business of lay citizens." 

And I called upon all citizens of California to exercise the virtues 
of fairness, restraint and forbearance in their contacts and dealings 
with the Japanese. 

But it is known that there are Japanese residents of California who 
have sought to aid our Japanese enemy by way of communicating infor- 
mation, or who have shown indications of preparation for fifth column 
activities. How far-reaching that may be, it is not known, and it is 
impossible, in the very nature of things, to determine. Therefore, it 
becomes absolutely necessary that comprehensive and elfective measures 
be taken for security against possible sabotage and other fifth column 
activities by the Japanese in California. I am sure that all loyal Jap- 
anese will understand this and will be willing to manifest and prove 
their loyalty by cooperating in the perfection and execution of plans 
that will assure this protection to our State and Nation, as well as for 
their own safety from unfair and abusive treatment which might be 
difficult to restrain if such measures of protection were not adopted. I 
have received assurances from many leading Japanese residents of their 
desire to thus manifest their loyalty. 

On Monday of this week, in the Governor's office at Sacramento, 1 
met with General DeWitt of the Western Army Command ; Thomas B. 
Clark, representing the Attorney General of the United States and the 
FBI; J. M. Thompson, representing the Department of Agriculture of 
the United States; W. J. Cecil, Director of the Department of Agricul- 
ture of California; and Adjutant General J. 0. Donovan of the Cali- 
fornia State Guard, for the purpose of discussing particularly this 
problem of the Japanese population and developing plans for protection 
against any menace to defense and civilian safety from the large popu- 
lation of Japanese within our borders. 

I want all loyal Japanese citizens to know that this problem and 
the development of plans for its solution were approached by all of us 
with the considerations for their loyalty, indicated in my announce- 
ments above-mentioned, and that they will be called upon to manifest 
their loyalties in a real and most convincing maimer by cooperating and 
aiding "in carrying out .such plans as may be adopted, and by making 
real sacrifices to that end. Many of the Japanese race are serving in the 
United States Army and may even now be on the front line of combat 
against the Japanese Government forces. Surely those loyal Japanese 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



347 



citizens who are not in the combat forces should be willing to adjust 
their lives to meet any requirements considered necessary for their own 
protection, for civilian protection generally, for national defense, and 
for the winning of the war. 

It so happens that about three-fourths of the distributors of agri- 
cultural foodstuffs in California, heretofore licensed by the Department 
of Agriculture of this State, are Japanese, and a large part, if not most 
of them, are alien Japanese. Such licensees have had access to military 
and naval base areas and vital defense production plants. It has been 
deemed necessary to revoke such licenses and deny the issuance of new 
licenses to any such alien enemies, and to investigate and use discretion 
in issuing licenses to any of the Japanese produce distributors. It so 
happens, also, that agricultural production, and particularly of food- 
stuffs so important to maintain and to increase as a part of the program 
of production of food for victory of the Department of Agriculture, is 
very efficiently carried on and performed by Japanese. To lose the 
benefit of this Japanese labor in agricultural production would be a 
serious loss to our war economy. That fact also is taken into considera- 
tions in plans for regulating the activities of the Japanese. 

The fact that most of such agricultural production is within what 
is defined as the combat zone of California; that is to say, a strip 
extending inland for a hundred miles from the seashore, makes this 
phase of the problem most difficult. The Army high command has 
determined, as a necessary measure of safety, that all alien enemies 
must be removed from the greater part, if not all, of this combat zone, 
and the Attorney General of the United States is now designating spe- 
cific areas within the combat zone from which removals are now taking 
place. But obviously this is not considered sufficient protection, either 
by the high command of the Army or by me and other State govern- 
mental officials, or by the Department of Justice of the United States. 
And California citizens generally are naturally aroused and alarmed 
as to the possibility of sabotage and organized fifth column Japanese 
activities in any area where large numbers of Japanese reside. Hun- 
dreds of letters have been received by me from citizens, manifesting this 
alarm, but without hysteria; showing only constructive concern that 
proper steps shall be taken to prevent trouble and injury from and to 
this racial group. Therefore the necessity of comprehensive plans with 
reference to the Japanese population for the duration of the war. 

At our conference on Monday, general plans were agreed upon for 
the movement and placement of the entire adult Japanese population 
in California at productive and useful employment within the borders 
of our State, and under such surveillance and protection for themselves 
and the State and Nation as shall be deemed necessary. A survey and 
census, started over a month ago by our State Department of Agricul- 
ture, will soon be completed, which will show the precise status (as to 
citizenship, relationship, location, occupation, and other pertinent infor- 
mation), of every adult Japanese occupant of farm lands. This infor- 
mation, together with the registrations required by the Federal Govern- 
ment, will enable us to know our Japanese population and where they 
are; what they are doing, and how their services can be utilized to help 
win the war. A survey is also being made by our State Department of 
Agriculture of the localities in which agricultural production can 



348 



STATE PAPERS AND PUBLIC ADDRESSES 



be carried on with Japanese labor without encroachment upon the 
restricted areas within the combat zone. All of this information will be 
speedily prepared for a further conference, soon to be held, by the same 
representatives of the Army, the Department of Justice, the United 
States Department of Agriculture, our State Director of Agriculture, 
the Adjutant General and myself, to definitely determine upon specific 
plans for comprehensively locating and regulating the activities of our 
adult Japanese population for the duration of the war. Such plans, we 
believe, are the most feasible for meeting this problem, both from the 
standpoint of State and national defense and from the standpoint of 
fairness to the Japanese people themselves. We believe that such plans 
as finally worked out and put into effect will prevent the necessity of 
considering the drastic alternative of responding to the demand, which 
is quite general in the State as well as throughout the Nation, that the 
entire adult Japanese population be removed and concentrated in the 
interior of the United States. 

It is obvious, therefore, that all loyal Japanese citizens must, when 
called upon, show their loyalty in cooperating in the execution of such 
plans when they are finally determined upon and put into operation. 
>— ' - I expect in another broadcast, at an early date, to be able to be 
more specific in reporting the progress of this undertaking. 

I thank you and bid you good night. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



349 



THE BROTHERHOOD OF MAN 

Address given before the conference of Christians and Jews, 
Los Angeles, February 13, 1942 

In spite of times that try men 's souls as never before in the history 
of this country and the world, the American people have not yet begun 
to lose their faith in the American way of life. It is still the only 
way of life for America — indeed, for the world. They believe this so 
deeply that they are givinp: their sons to die for this imperishable 
ideal, which Lincoln's birthday in our Nation rekindles each year as 
the last best hope for mankind. To build on this earth a real brother- 
hood of nations is Americanism. 

For this solemn reason alone, I have set aside this Friday, now 
immediately followinp: the holiday that closed the Governor's office 
yesterday in Honor of the Great Emancipator, as the official occasion 
to mark observance throuehout this State of National Brotherhood 
"Week, ending February 22d, on the Birthday of the Father of our 
Country, whose leadership laid the foundations of brotherhood and 
peace by services so notable that the whole world pays tribute now to 
George Washington as the cornerstone of American Patriotism in the 
temple of Liberty and Human Rights no matter what form of religion 
we may (or may not) profess. 

As Lincoln said, it is altogether fitting that we should pause in 
this hour of deepening crisis to pay tribute to the ideal of human 
brotherhood as the only thing worth while in the grand struggle for 
human existence and survival that now tragically involves our entire 
world and sends us back to Divine Providence for guidance and power 
to win the war and win the peace so that our sons and daughters may 
enjoy the American Way of Life, which is the way of Brotherhood 
under Law and Liberty and not enslavement. The souls of men and 
women and children under tyrants, with no souls and no laws of man, 
are worth preserving from beasts that only live to kill. 

When the first bomb falls in this officially designated theatre of 
war, Californians will be taught the first law of brotherhood for they 
will have to learn that — We are Our Brother's Keeper. 

War will teach us that. Civilization should have taught us this 
saving truth. All our sons and daughters should have practiced this 
every day. Then there would have been no need to set aside a week 
each year, as has been done for nine years, to remind man that he is 
his brother's keeper. We would have known that truth and it would 
have set the world free and there would be no Singapore today to 
mock the poor substitute for justice that nations have produced since 
the Armistice and called it International Brotherhood. 

I am grateful, in these busy days, that the Conference of Jews and 
Christians, founded by Dr. Everett Clinchy after his return from war 
experiences in France, has lead the way in America in cutting through 
the barbed wire of intolerance and racial hatreds. I am profoundly 
stirred to dream how much different the world would be at this hour 
had this movement for International Brotherhood, founded in 1928, 



350 



STATE PAPERS AND PUBLIC ADDRESSES 



under the auspices of such leaders in the world of men as Former 
Chief Justice Huprhes and Secretary of the War Newton D. Baker, 
become the way of life for the now embattled nations of the world. 

The veil of the temple has been rent in twain. There is no ruling 
spirit of justice. There is no dominantly effective peace. There is 
no unshackled liberty under international law for there is only the law 
of war until Victory comes. There is no brotherhood — but there is a 
faith that never dies in Brotherhood when the dawn of peace breaks 
and the Order of Man begrins in a new free world. Cost what it may 
in time and blood, and ceaseless sacrifice, the American "Way of Life 
by Brotherhood and Freedom will never die in America. 

This impressive assembly of leaders in the field of Religion, Morale, 
Law, Education and Social Service in the Community, State and 
Nation inspires me to congratulate Mr. Thomas Evans of the Univer- 
sity Religious Conference, at the University of California at Los 
Angeles, for what T must consider a most impressive inovement in the 
field of Organic Reliirious Brotherhood and Administration in Califor- 
nia, and perhaps in the Nation, not to omit the somewhat more recently 
created Church and County Coordination Council under Dr. George 
Gleason. as Executive Secretary. If I include the National Open 
Parish in Pasadena, under whose arranging auspices this morning's 
events have been furthered (by transferring their program to this 
office from Pasadena), T shall have grouped three programs in the 
Applied Brotherhood Field that have the common factor of no eccle- 
siastical line, no barbed wire barriers of sect or doctrine or faith. The 
one ideal of an American Way of Brotherhood, as the true goal of all 
mankind, unites such American Religious policies of Church and State 
cooperation. 

There will never be any problem of Church and State to tear our 
Country apart as long as such successful experiments as these, and 
others that exist, continue their beneficent missions, joining Protest- 
ants. Catholics and Jews, and those of all faiths, in the spiritual soli- 
daritv of American Brotherhood. 

Glorious as these achievements are. the State of California tlnds 
itself compelled in the person of the Governor of the State to add one 
more chapter to the book on Applied Brotherhood that we have been 
editincr here in California. 

I refer to the fact that today also marks the first formal meeting 
of the three eminent commissioners of the Youth Correction Authority 
to inauirurate a procedure in American Brotherhood techniques that 
bases itself on an act of the Lecislature. passed unanimouslv by both 
houses, and siened by the Governor, desicrned to launch California as 
the first State in the TTnited States to pass legislation for Youth Cor- 
rection so far-reaching in corrective social and spiritual outlook for 
youth that experts have been heard to say that it is the most outstand- 
ing piece of legislation in this field that American Legal Authority has 
yet created. 

May I thank you citizens for the part you are playing in building 
spiritual bridges across the violent torrents of human passions and 
prejudices that divide the races of men, and may T pledge my sincere 
help in this work of National Defense and California Morale, until 
victory comes. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



351 



TO THE PEOPLE OF THE PHILIPPINES 

Radio broadcast over the Governmcftt short wave station, KGEI, 
February 13, 1942 

I welcome this opportunity to express to you loyal and patriotic 
men and women of the jjreat Commonwealth of the Philippines my 
sincere confrratulations and those of the people of California for the 
valiant fio-ht you are wapfinp: ajrainst an uncivilized foe. 

Your fio-ht ajrainst Japanese a<rjjression is mafrnificent. Your 
courag-e and determination has won for you the admiration of the free 
peoples of the world. 

The fearless and brilliant leadership of General MacArthur and 
his staff at Correpidor will continue to serve as an inspiration to you 
to fierht on until the fruits of victory are yours to enjov. 

Do not falter. Figrht ! Fi<;-ht ! Fi<?ht ! 

T?emember this, please. Japan can not win the war. 

Remember too, your voices will be heard at the peace table when 
defeated Japan, defeated Germany, and defeated Italy, beg our great 
President, Franklin Delano Roosevelt, for terms of peace. 



352 



STATE PAPERS AND PUBLIC ADDRESSES 



IN MEMORIAM 

Address at services honoring Long Beach residents who lost their lives at 
Pearl Harbor, Long Beach Auditorium, February 22, 1942 

The tragredy of Pearl Harbor, from the shock of which we have 
not yet recovered, will fro down in history and be remembered by 
future generations as America's first preat sacrifice in this world 
war — a sacrifice due to our naivete in the path of murderoiis outlaws — 
our failure to understand the treachery of barbarism. 

Notwithstanding the object lessons in deception, deviltry and 
crime, with which Hitler has shocked the world in makinq: his mur- 
derous assaults upon unsuspoctinsr nations with whom he pretended to 
want peace — actual experience with the same kind of fiendishness seems 
to have been required to awaken the peace lovinpr. srood neigrhbor 
people of America to the necessity of bein? on the alert for stabs in 
the back. That is the method by which wars are started and con- 
ducted by that triumverate of hellishness known as the Axis Powers. 

Therefore, as we meet to pay our tribute to the victims of the 
Pearl Harbor disaster and, followinjr in its wake and as a consequence, 
those who make the supreme sacrifice in defense of the Philippines and 
the East Indies, we can truthfully say they did not die in vain. 

This may be little solace to the families and relatives of these 
brave and true American soldiers and sailors, whose loss our whole 
Nation mourns, but whose lives it can not restore. 

But circumstance, fate, their o^vn patriotism, their own bravery, 
determined their destiny as the human sacrifices with wliich their 
country was suddenly catapulted into a war for its own life and for 
the survival of civilization. 

And to the families, relatives and friends of those boys and men 
for whom we here bow our heads in humiliation and sorrow, there may 
be some solace in this rationalization; that their precious lives were 
not spared only to be later destroyed alonp: with the lives of thousands 
of other American soldiers, sailors and flyers in the course of tlie Ion?, 
prrim, sanpruinary, bloody war we now must wajje until the Axis Powers 
shall have been destroyed, Japan shall have been conquered, and Pearl 
Harbor shall have been avenjred. 

Life would not be worth the living if we should fail to be victorious 
in this purpose. There is no middle or appeasement pround — either 
we and our allied nations will destroy this hydra-headed monster of 
crime and iniquity, with the visages of Hitler, Mussolini and the 
Nippon, or they will destroy us. Our fi^rht has just be<run as we 
enfrajre in these services for our dead in the battle of the Pacific. 

It is no time for us now to indulfje in complaints and criticisms 
of mistakes that have been made; of our failure to be on the alert. 
It serves no purpose to dwell on the obstructions to preparedness for 
action by erstwlnle isolationists, or upon the delays to our ultimate 
victory, caused by the complacent attitude of the "business as usual" 
people who have said "it can't happen here." 



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It is no time for partisans to be pestering their animosities against 
those in governmental authority who were called war mongers when 
thej'- said it can and in all probability would happen here— let us be 
ready. The fact is, it has happened here before we are ready. 

There should be no further need for preaching unity since Pearl 
Harbor and the occasion of these memorial services. The very instinct 
of self-preservation requires of all Americans unity of sentiment, unity 
of purpose, unity of effort, unity of action for victory in tliis terrible, 
total war. 

Differences may arise as to methods of procedure, which the good 
sense of those placed in positions of leadership in military and civilian 
authority will constructively reconcile or remove. No person or group 
has any corner either on wisdom or patriotism. And the transparency 
of self-seeking purposes in the name of patriotism and with pretensions 
to superior wisdom will become obvious to all thinking citizens. 

To the memory of the dead we here eulogize, to those still living 
only to suffer or to die for the same cause, for freedom of the living 
and for the salvation of future generations, we all owe every duty, 
every sacrifice we are called upon to render for the achievement of 
final victory. That duty, that sacrifice Ave can not faithfully perform 
nor can we realize the full benefits of the freedom and deinocracy for 
which we are fighting after victory is attained unless we eliminate from 
our souls those animal instincts of selfishness and greed, which are the 
basic causes of all wars and human misery. 



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STATE PAPERS AND PUBLIC ADDRESSES 



VICTORY RALLY 

Address given at public ceremonies at Municipal Auditorium, San Francisco, 

April 9, 1942 

NeA'er since the birth of our republic has it faced danprer of 
destruction as serious and startlin<i as it faces today. Never since the 
independence of the United States of America was achieved has there 
existed so prrave a possibility that Ave could be broucrht under the domi- 
nation of a foreifrn enemy. Never have the fundamental risrhts of men, 
which our Nation was constituted to establish and protect, been so 
endangfered ; never were the civil liberties, the freedom and democracy 
of the American people, who for one hundred and sixty-five years have 
carried the torch of progress for the rest of the world, been so seri- 
ously threatened as they are today. Never before has the world experi- 
enced a total war in which we are now fiphtinf; for our life as a Nation 
and our lives as free men and women afraiust the aprerressions of the 
powerful military forces of the world's or<^anized outlaws and gang- 
sters, known as the Axis Powers, set out to enslave us and the rest of 
mankind. No previous international or internal conflict which has 
involved our country in war is comparable to our present involvement. 
There may have been room and rationalization for pacifism and indif- 
ference on the part of many who could not be counted disloyal in 
connection with previous wars, but there is absolutely no room for a 
single citizen of the United States of America to be a dissident or a 
pacifist in this total war, unless as a conscientious objector, he prefers 
chains and slavery to freedom and decency. 

This is indeed a people's war for the right to life, liberty and the 
pursuit of happiness. This is no war for foreign markets for American 
capitalists; it is no war to protect property rights or interests of any 
American enterprisers in foreign lands. It is no war for territory 
or imperialistic purposes that we are fighting, and it is no war for the 
benefit of arms and munition makers. It is the war of every man, 
woman and child in America ; the war of the common people and their 
government to maintain their fundamental human rights and social 
gains, for which all the sacrifices of the past have been made. There- 
fore, in the very nature of this war, in which all Americans now find 
themselves, there mu.st be unity. And with unity of sentiment there 
must be unity of action. 

We meet here tonight in a victory rally, in California with its 
thousand miles of Pacific coast line, which is already a part of the 
battle of the Pacific and which may be the actual theatre of all of the 
horrors of war before we fully realize it. We meet in the great 
American city of San Francisco, perhaps the most exposed and the 
most strategic Avestern American base in the war of the Pacific. Since 
we were attacked at Pearl Harbor on December 7th, last, we have wit- 
nessed the advances of the efficient military machine of the enemy, as 
one after another of the dominions and territories of our allies have 
fallen under its domination, and we have noticed that even up until 



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355 



their citadels were bombarded by the enemj^, their people were apa- 
thetic. They conld not believe they could be taken. 

Today Bataan was forced to finally surrender. Corref?idor can 
not always hold out. The Philippines are solidly in the hands of the 
Japs. The gallant General MacArthur and all of his organization and 
all of the forces than can be furnished him, will, like the inadequate 
forces in the Philippines, carry on the war from Australia with every 
ounce of effort they possess, and with the heroism characteristic of 
American soldiers. But Australia and New Zealand, too, may be over- 
whelmed and taken. When the attack Avill occur on California or 
elsewhere on this west coast of America, Avho knows? Our enemies; 
and they do not tell us. Of course, we immediately think of the diffi- 
culties of the long supply lines to support attacks on our coast and 
the difficulties of maintaining an invading force, and we naturally and 
properly think of and rely upon the combat forces of our country on 
land and sea and in the air, organized, stationed and programmed to 
meet the enemy. But we can not have the kind of forceful resistance, 
nor can we carry on the aggressive and offensive warfare for victory, 
which we must relentlessly pursue, without the unity, the aroused 
enthusiasm, the determination, and the united action of every man, 
woman and child of America. The main thought in the minds of all 
of us should be "What can we do to help and hasten our winning the 
war? Where can we best serve? What contributions can we make? 
What sacrifices on our part are needed?" 

We may observe that there are some who have such an amount 
of selfishness and greed in their make-up — that their chief concern is 
in making all the profits they can out of this life-and-death struggle 
of their country. Let us brand them as saboteurs, if not traitors, but 
do not let any such attitudes fix the standards of our loyalty and 
patriotism in support of the determination of the United States of 
America to carry this war to victory with such aggressiveness as shall 
hasten the day when the forces of the Axis Powers shall be crushed 
and completely conquered and their leaders executed in their own 
capitols. 

California State and local governments, their State and local 
councils of defense, the State Guard, State Militia organizations, and 
local police forces will be ready to do their duty in every condition of 
this war. Organization and preparations for any and all emergencies 
are going forward with a consciousness on our part that nothing can 
be left undone that needs doing, nor can we delay doing the things 
needed to be done to be in readiness for actual warfare here. This 
preparation calls for unity and the people's enthusiastic cooperation, 
which is confidently relied upon. And the rest of the Nation may con- 
fidently rely upon California to perform her full duty in the important 
geographical position she holds in this Avar. 



356 



STATE PAPERS AND PUBLIC ADDRESSES 



SAN QUENTIN ON THE AIR 

Excerpts from weekly radio program sponsored by inmates of San Quentin, 
Mutual Network, April 19, 1942 



Introduction of Governor Olson by Warden Clinton T. Duffy: 

Good evening: ladies and gentlemen. I would like to take this 
opportunity to extend to you my personal thanks for j-onr letters — 
expressinpr approval of the work we are doinpr to aid in rehabilitating 
inmates of this institution. There are many phases of the rehabilitation 
proprram which we have been unable to touch upon durinpr the past 
thirteen weeks. I would grreatly appreciate your comments, by a card 
or letter, regarding the continuation of "San Quentin on the Air." 
The programs for rehabilitation of the men within penal institutions of 
this State have been successfully carried out through the efforts of our 
Governor. A great humanitarian possessed of a spirit of justice, he has 
revolutionized the penal set-up of California. "We are honored to have 
him as our guest on this evening's broadcast. I present the Honorable 
Culbert L. Olson, Governor of California. 

Warden Duffy, inmates of San Quentin, Folsom, Chino and Tehach- 
api and people of California : The series of radio broadcasts which have 
been conducted here in San Quentin by the inmates themselves, giving 
opportunity for their self-expression, exhibiting their talents for cul- 
tural entertainment, telling the outside world of the useful work in 
which they are employed and what they are doing for their own rehabil- 
itation and redemption to society, is s>'mbolic of the civilized policies 
which we in California have adopted in the administration of our penal 
institutions. Those policies are not to convert these prisons into any- 
thing other than penal institutions, but to maintain them as such in a 
manner which will accomplish the purpose of penal institutions. The 
most important purpose is the reform and rehabilitation of prisoners — 
their restoration as useful and respected members of society. Surely 
this purpose can not be served by hatred on the part of prison manage- 
ment toward their prisoners, nor by ignorant, brutal and inhuman 
methods of enforcing discipline. That is the reason which compelled 
me to make a complete change of management, methods and policies in 
the conduct of the prisons of California. There are now no black holes 
or dungeons, there are no more beatings, no chibbings and no more 
shooting without provocation. And no longer does there obtain in this 
prison the psychology of hate, suspicion, distrust and lack of coopera- 
tive effort on the part of the prisoners which such methods produced. 
On the contrary, there is morale, a spirit of cooperation, a willingness 
to obey the rules of discipline, desire to perform all work assigned and 
to over-work in the production of war materials, which is inspiring. 
There is a confidence in the concern of the administration for the indi- 
vidual cases of the inmates, for their conduct and disposition to over- 
come the weaknesses which spelled their downfall and for their efforts 
to regain their place in society and to live as law abiding and respected 
citizens. That hope, that effort, that striving for redemption must not 



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be crushed. It must be encouraged and aided and given every oppor- 
tunity to grow into full fruition and realization. After all, prisoners 
and free men — all of us belong to the same family — the human family, 
which we call society. No one can fall so low as not to still remain a part 
of the brotherhood of man and he should know that his family longs for 
and welcomes with an outstretched, aiding hand his restoration to the 
right kind of life. But that restoration is for you prisoners to accom- 
plish with the rehabilitation opportunities given under present prison 
policies and the system of parole which has proved, through the years, 
its outstanding success in the aid of restoring to an upright, honorable 
life, so many convicted of crime. It is unfortunate that from persons 
and circles which should be better informed, we notice from time to time 
criticism aimed to destroy the parole system and to that end publicity 
of untruths or half-truths about individual cases on parole. It is to be 
hoped that such efforts will end with greater enlightenment on this 
subject. Let us hope that, in our struggle to attain the true objectives 
and purposes of organized society and government, we shall find the 
way to remove causes that breed tendencies toward crime. Thank you 
and good night. 



358 



STATE PAPERS AND PUBLIC ADDRESSES 



CALIFORNIA SPORTSMEN 

Address at annual meeting of Fish and Game Protective Association, 
Porteriille, April 20, 1942 



I am very happy for the opportunity of meeting with the Porter- 
ville Fish and Game Protective Association and to have participated 
with its members and friends in their annual get-together. 

The natural resources of the State of California are its most 
cherished heritage, and I have zealously guarded them for the people 
of the State of California. They are given to us in trust for they 
belong not only to this generation but to those who come after us. 
This is a sacred trust. The impact of the war upon our natural 
resources is great. The vulnerability of our forest areas, the habitat 
of the wildlife, has been the subject of great concern on the part of 
the officials charged with the preservation of peace and tranquility 
in our State. 

I need not point out to you the great fire hazard that exists after 
the rainy season ceases, and I am glad to report that having antici- 
pated this hazard we have done and are doing all within the power of 
the State Government to take preventive measures to either eliminate 
the hazard or reduce the ravages of any fires that do get started to a 
minimum. 

The State Council of Defense, in connection with the Department 
of Natural Eesources, has made a thorough study and has produced a 
plan that is feasible and workable. It needs, however, the cooperation 
of the people of the localities in which fire hazard exists and of the 
Federal Government to make it fully effective. The State Government 
today is endeavoring to acquire the necessary equipment to adequately 
care for the dangers that can come. 

By far from the least of the political divisions in the State of 
California is that of Fish and Game; the one in which you are 
primarily interested. I fish and I have hunted, and I know the 
relaxation both mental and physical that comes to people wlio go afield 
to renew their contacts with Nature. The right to hunt, the right to 
fish are inherent in our democratic system of government. They must 
be guarded and preserved for our people and futui'e generations. 
My pledge to you is that they will be safeguarded and preserved, and 
in this I wish to point the administration of laws pertaining to fish 
and game since my advent to the Governorship. 

I appointed a Fish and Game Commission, the members of which 
are well known to you. They are Mr. Nate F. Milnor, Mr. Edwin L. 
Carty, Mr. Germain Bulcke, Mr. Lee F. Payne, and Mr. Ben Williams. 
These men are all ardent and sincere sportsmen. They know all of 
the problems that confront sportsmen. They are honest men, and to 
them I have designated the administration of fish and game laws. 
Having given them a job to do and having satisfied myself that they 
are doing it, I have been content to let them do that job. They know 
the intimate needs of you sportsmen and that is why I have accepted 



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their recommendations without reservations. Their accomplishments 
have fully justified the trust that I have placed in them. 

During the last year the Division of Fish and Game has brought 
into production two great fish hatcheries, innovations in fish cultural 
work. One is at Hot Creek in Inyo County and the other at Fillmore 
in Ventura County. These hatcheries, in my estimation, are fitting 
testimonials to what the Fish and Game Commission has accomplished. 

It has been the policy of the Commission to bring hunting and 
fishing closer to the people of the State, to plant the streams and to 
repopulate the uplands and forests with game so that it is readily 
available to he who would go afield to seek it. This program is 
meeting with success. 

Few people in California know that our State is the foremost 
State in the Union in commercial fishery products. Our coastal waters 
abound in fish that have become an essential part of the food supply 
of our Nation. The byproducts of this fishery are indispensable to 
agriculture and to industry. There has heretofore been some conflict 
between the interests of the .sportsmen and the commercial fi.shermen, 
but I think that through education and a mutual under.standing of 
their respective problems this controversy is rapidly dissipating itself 
into mist. The issues are not great and they can be readily reconciled. 
The present Fish and Game Commission has done much to bring about 
a better understanding between the two groups, based upon education 
and common sense. 

The Division of Fish and Game, with its efficient and well-trained 
law enforcement bureau, was called upon as early as December 8th to 
play a vital role in the defense effort, and it is continuing in that role. 
These wardens, with an intimate knowledge of their respective terri- 
tories, are indispensable at this time. The marine wardens of the 
Division know the inland waters of this State as well as any group 
and are used in the detection of saboteurs and to prevent the entrance 
of enemy ao-ents throusrh our coastal areas. 

The California Divi.sion of Fish and Game has had manv serious 
handicaps to overcome. It has met them intelligently and with vigor.. 
It has been successful in overcoming most of them but in no case "has 
it considered itself licked. 

The diversions of water for power and irrigation would deplete 
our fi.sh if correctives were not applied. The Commission has met the 
challenge of this problem. It has required stream improvement and 
fish hatcheries, sometimes the introduction of new species, but it has 
been successfully met. 

The great Central Valley Project would have exterminated our 
salmon but for the fine work of the Division of Fish and Game in 
cooperation with the United States Fish and Wildlife Service. 

Today we are engaged in total war — devastating, horrible war. 
A war into which we were plunged by the greed, the avarice and the 
blood lust of power-drunk nations. We are fighting to preserve our 
America, our democratic way of life— to preserve the traditions so 
sacred to all of us. 

War — total war — means a drain upon the entire resources of the 
nations engaged in it. Our sacrifices are great now, but will be greater 
as time goes on. We will make them in the American way without 



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flinching or complaint. They will affect our natural resources. "We 
must have timber, we must have oil — minerals — all sacrificed and 
destroyed. The greatest and most sacred of these is the lives of our 
young men — men killed in battle — men maimed, broken in soul and 
body, the derelicts of war. 

When sportsmen are called upon to make their contribution, they 
will do so willingly for they above other groups know and appreciate 
the heritage of free men. They know that the dictators of Europe 
and Asia do not allow their subjects to possess arms or to move freely 
about. 

In the defense effort we have a definite place for free men trained 
in the ways of the great outdoors, men who know how to use firearms 
and men not afraid to defend their homes and the form of life they 
cherish. 



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361 



FLAG DAY— 1942 

Address broadcast from ceremonies at San Diego, June 14, 1942 



My Fellow Citizens. 

This year particularly do we realize that the celebration of Flag 
Day is not merely a perfunctory ceremony. We gather in our respec- 
tive communities throughout the State and Nation to pay patriotic 
tribute to the Stars and Stripes because that Flag is the emblem, not 
only of the beginning and historic achievements of American demo- 
cracy, but of the promise it represents of still greater achievements. 
Today it waves aloft as the rallying insignia for the aspirations of all 
mankind in their confused struggles for a better world ; as the inspira- 
tion of America's leadership in that struggle, as well as America's 
determination to maintain that leadership and carry on that struggle 
to victory. It means democracy, government of, by, and for the people, 
and It represents all of the sacrifices of life and suffering that have 
been made by Americans since the Minutemen of Lexington and Con- 
cord gave their lives to implant it as the symbol of liberty and demo- 
cracy in building the foundations of our Republic. It may be truth- 
fully said that abuses have been committed under its protection — abuses 
of economic liberties, taken by uncontrolled individual selfishness and 
greed, as well as abuses of the civil liberties which it guarantees. But 
It remains within the power of the people, with the institutions of 
democracy under that flag, to correct and prevent its abuses. 

No American citizen, standing under that Flag and all that it 
means, however he may have been neglectful of the obligations it calls 
upon him to perform in his daily life, in his contact and relationships 
with his fellow citizens, in civilian or in military service, but who today 
must be thrilled to the highest point of patriotism and willingness for 
self-sacrifice as he gazes at the Stars and Stripes. He must now fully 
realize what that Flag means to him and to the rest of mankind in this 
war-torn world. The protection of the very life of our Nation and 
of its people against enslavement by a barbarous military tyranny, as 
well as the redemption of subjugated peoples who are now suffering 
under the persecutions, the slavery, and the massacres of that tyranny 
of brutal aggressors depends upon our carrying that Flag to victory. It 
is inspiring to realize that our American Flag is now hoisted on the 
battle fronts of all the world, supported by the soldiers, sailors, marines 
and flyers of the American Army and Navy, in a life and death struggle 
for the victory of our cause. 

Yesterday we celebrated MacArthur Day in honor and recognition 
of the valiant and courageous manner in which the men and boys of 
these American forces have acquitted themselves under the leadership 
of this gallant American General. But America has just begun to get 
into condition to fight; aroused at last by being catapulted into the 
war with the suffering at Pearl Harbor. Unity and action on the 
part of all the American people has obtained. All-out production to 
the full capacity of our productive facilities is rapidly progressing. 
Labor and management are working together. Stoppages from 

24—18527 



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STATE PAPERS AND PUBLIC ADDRESSES 



internal disputes are banned. Amicable and cooperative adjustments 
have been found in the necessity for the common enthusiastic elfort of 
all. So today we stand under our glorious Hap, following it wherever 
it may lead ; following it with assurance that it will lead us and the 
United Nations to a complete, and, let us hope, an early victory. 

This struggle is a total war, engaging the services of the civilian 
population, not only in producing the materials of war, the food, the 
supplies, providing for the care of the wounded and the families of 
the men at the front, but also involving the possibility of the horrors of 
combat war being visited upon the civilian population, women and 
children included, with death-dealing bombs and bullets, should the 
enemy's aggressions reach our shores or our skies. California is a war 
front in the war of the Pacific. The Japanese are now attacking our 
close outposts in the Pacific ; our very shores of the Territory of Alaska 
in the north. "VYe look with confidence toward their successful repul- 
sions by our armed forces at these outposts, by our Navy and our Air 
Force, dependent upon the success and rapidity with which we furnish 
the arms and maintain the supplies they must liave. But all civilians 
of California must be on the alert, and civilian preparedness for any 
form of attack must be ready to meet it and its consequences and to 
give every cooperation and support to the combat forces here on our 
home front. 

As Governor of California, I am proud to say that we are reaching 
that stage of complete preparedness. It has taken two years, since I 
first appointed a State Council of Defense in California, to have 
thoroughly organized our civilian councils of defense in the various 
counties, cities and communities tliroughout the State, and their units 
of volunteer civilian defense and protection. Similar to delays in the 
manufacture of war materials have there been delays in the Federal 
Government securing the manufacture and distribution of needed 
civilian defense equipment, such as fire fighting and bomb extinguish- 
ing equipment, gas masks, etc., but they are on their way ; in fact, are 
beginning to come in. 

Within tlie powers given me by the Legislature, I can assure j'ou 
that the California State Guard, its active troops, now employed in 
guarding vital facilities and installations against sabotage, as well as its 
reserve forces, are efficiently organized and in readiness for orders and 
action, with a high standard of morale and of real patriotism. The 
numbers of the State Guard proper, both active and reserve forces is 
limited by the Legislature to a total of approximately 28,000 men and 
officers. But additional military protection to the civilian population 
behind the lines of the regular combat forces of the Federal Govern- 
ment in California, is being provided by the organization, which I 
began some months ago, of units of the California State Militia in each 
of the counties and communities of the State, both rural and urban. 
These units, as organized and authorized to bear arms, are being trained 
by officers of the Guard and of the United States Army for military 
duty, if and when their services should become necessary for military 
protection of the homes and families in their respective communities; 
protection against parachutists and saboteurs or other inflictions which 
might result to endanger life and property behind the regular combat 
lines. As guns and ammunition shall become available to the War 



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Department for that purpose, they will be supplied to these units of the 
Militia of California, as well as to the State Guard. We anticipate that 
the total number of enlistments in all of the organized units of the State 
Militia will reach somewhere between one hundred and two hundred 
thousand men at an early date. A large proportion of such enlistments 
have already been made, and their training and drilling are under way. 

I am convinced that every citizen of California stands ready to 
meet and perform his duty with the same courage and effectiveness 
exemplified by their fellow Americans now on the fighting fronts of the 
war, and that in any emergency or hazard, all Californians will justify 
their realization of what that Flag means to them and to their fellow 
countrymen. 

In closing, I wish to express this thought regarding the peace for 
which we are fighting. We do not want a peace without victory in this 
war, because the peace we are fighting for can not be had without a 
complete victory — an unconditional surrender and disarmament of the 
Axis Powers and their complete submission to the terms and kind of 
peace that shall be determined by the United States of America and its 
Allied Nations. That means no negotiated peace with Hitler, Hirohito, 
and Mussolini, individually or collectively. It means no peace until 
they are annihilated. When that final victory shall have been won with 
the strength of America and its determination in this war, then must we 
find the way to the establishment of an enduring world peace. This 
may require doing away with worn-out systems, and international com- 
petitiveness which breed wars. To accomplish such an enduring peace, 
institutions which we envision must be constructed with a world order 
based upon human rights, human needs and the principles of the char- 
ter of the Atlantic to be enforced by an association of the democratic 
nations of the world. 



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STATE PAPERS AND PUBLIC ADDRESSES 



APPRENTICESHIP GRADUATION 

Address delivered at exercises held under the auspices of California 
Apprenticeship Council and the Public School Systems of 
Los Angeles City and County, Manual Arts 
High School, Los Angeles, July 9, 1942 



Mr. Chairman, members of the California Apprenticeship Council, rep- 
resentatives of employer and labor organizations, apprentices 
and their friends and parents, representatives of the School 
Districts and Vocational Schools, the Employment Service, the 
Federal Committee on Apprenticeship, Training Within Indus- 
try, and all others who, too, are working upon and aiding in 
solving our tremendous State and National problem, the 
production of manpower — and my fellow citizens of California 

Tonight we are gathered in the auditorium of the Manual Arts 
High School in Los Angeles. We are met for the purpose of presenting 
certificates of journeymanship to more than three hundred young men. 
Collectively, these young men represent skills in twelve different trades 
— all essential and vital to our Nation 's war effort. 

It is indeed fortunate that California in 1939 passed the necessary 
legislation which has made this apprenticeship program possible. 

Under its terms California has already given industry more than a 
thousand thoroughly skilled workers, and now has more than twelve 
thousand apprentices throughout the State fitting themselves for all- 
round journej'manship. 

This is an outstanding accomplishment — a real tribute to the poli- 
cies of the California Apprenticeship Council whose members I, as 
Governor of the State, have had the privilege to name, and to the admin- 
istration of these policies under the leadership of Mr. George G. Kid- 
well, our Director of Industrial Relations, who is the Administrator of 
Apprenticeship. 

We talk so much about apprenticeship. In very simple language 
let us describe it — it is an applied program of earning while learning. 

The rules and regulations for the earning part of apprenticeship 
are set up by the Apprenticeship Council, and when adopted by a local 
joint committee equally representing management and labor, with the 
approval of the Administrator, become effective on the job. 

The learning part is carried on jointly on the job where the 
apprentice under the guidance of a competent journeyman gets his 
practical experience in all parts of his trade, and in the schools where 
he receives his related instruction from carefully selected and trained 
instructors. The related instruction is the jurisdiction of the State 
and Local Boards of Education under the leadership of Mr. John C. 
Beswick, Chief of the State Bureau of Trade and Industrial Education. 

At the start this was only an idea. The responsibility of your 
Government was : How to make it work on the job ; how to encourage 
and guide a program that would do two things: (1) give our young 
people an opportunity to really learn a trade, and (2) provide for the 



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State and Nation a sufficient number of fully skilled workers to meet 
the need. 

Keep in mind the fact that when we started the work of resolving 
this idea into actual accomplishment, our Nation was at peace with the 
world, but foreign dictatorships were threatening. At home we were 
in the midst of a terrible depression. Millions of people were out of 
work and rightfully clamoring for jobs. Proportionately speaking, the 
great amount of the unemployed came within the age brackets of sixteen 
and twenty-five. 

Many social factors then present in California and the United 
States were similar to conditions which cave rise to the willingness of 
youth to follow European dictators. By them youth were promised 
self-respect, jobs and security, and their kind of governments were thus 
able to enlist in their armies the youth who saw no future for themselves 
under democracy. We, Americans, didn't believe such promises then — 
and time has proved our contentions to be correct. 

However, we could not afford to have a condition permanently 
established wherein millions of young people graduating from schools 
could find neither employment nor any hope for employment. There is 
nothing more detrimental to the physical and moral make-up of a young 
person than a condition of helplessness caused by a fruitless search for 
the means of earning a livelihood. 

"We do not say that apprentice training will solve the whole youth 
problem. "We sTibmit it as a first step toward the solution of the general 
economic problem of youth. A brief history and outline should be 
interesting. 

The idea of establishinsr an orderly and well -regulated program 
providing for the entrance of young people into skilled trades and their 
continued guidance and supervision during all the time they serve as 
apprentices, through the cooperative efforts of Federal and State agen- 
cies of government and industrial crouns, owes its origin to an Execu- 
tive Order of President Poosevelt issued in 1934. 

It took five years of effort to start the present apprentice training 
program in California. Two years were actually lost when in 1937 
after our Lec-islature passed the necessary law, it was vetoed. However, 
the value of the time so spent is best evidenced by the fact that upon the 
second passage of the California law there were but three dissenting 
votes in the State Assembly, while in the Senate the A'ote was unanimous 
in approval. The theory which made this accomplishment possible was 
the forthright declaration that the apprentice problem is an industrial 
problem and should be accepted by industry as its responsibility; I 
speak of industry as including employer and employee. 

With that primary principle recognized and accepted, we were 
faced with the fact that there was no industrial group so established as 
to accept the responsibility of leadership in outlining such a program as 
was needed in our State. It was therefore unanimously agreed that 
such leadership should be vested in an ajrency of government selected 
from those groups upon whose cooperation the institution of a bona 
fide apprentice training program would depend. 

In setting up such an agency the three groups most directly con- 
cerned — employer, journeyman, and apprentice — were recognized. We 
found that each group had some definite opinions against an apprentice 



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STATE PAPERS AND PUBLIC ADDRESSES 



program. Our job, then, was first to define the duties and functions of 
the California Apprenticeship Council, and thereafter to outline poli- 
cies to be followed which would eliminate fears predicated upon mal- 
adjustments of the past, and at the same time give definite indications 
of future procedure that would protect and advance the best interests 
of all parties concerned. 

We now have the Shelley-Maloney Apprentice Labor Standards Act 
of 1939 which, when passed by the Leprislature and sio:ned by me, as 
Governor, became effective September 19th of that year. This Cali- 
fornia law provides for the appointment of an apprenticeship council. 
We now have such a council, in operation since October 14, 1939. It 
comprises four representatives from employer orjranizations. four from 
employee organizations, one representinpr the general public, with the 
Chief of the Bureau of Trade and Industrial Education and the Direc- 
tor of Industrial Relations added thereto as ex officio members. On 
this council we have men of experience with the problems of the air- 
craft industry, printing trade, heavy industries, general construction 
work, shipbuilding, sub-contracting, the automobile and electrical 
industries, and the general public — a splendid cross section of Califor- 
nia's industrial life. I realize that this group had a big job to do. 

However, with the enactment of apprenticeship legislation there 
was no money appropriated to carry on the work. It, therefore, 
became my privilege as Governor to allocate the necessary funds to 
carry out the purposes as outlined in the establishment of the Califor- 
nia Apprenticeship Council. 

In 1941 and again in 1942. due to the war emergency, it was nec- 
essary to make further appropriations from the emergency fund in 
order to carry on the increasing work of that Council and it was my 
pleasure to make this money available. 

I make these statements for the purpose of demonstrating that our 
desire to help young people has been put into practical operation. 
The fact that the California Apprenticeship Council, in the work that 
it has done in the three years of its existence, surpasses the activities 
of any other State, more than justifies its continuance on an increased 
scale. Tonight we have the living examples — more than three hundred 
of them— of why California leads the Nation in the promulgation of 
apprentice training. Here too we have committees of equal represen- 
tation from the employer and employee organizations of the various 
skilled trades in industry. Through the medium of collective bargain- 
ing these employer and employee organizations and the Department 
of Education have cooperated in an harmonious relationship which, in 
turn, has made possible this splendid demonstration. 

There is but one way to produce skilled workers, and that is 
through the medium of training apprentices. There is but one way 
to set up such a program so that it is basically sound and workable, 
and that is by giving full consideration to the problems of the employer, 
the journeyman, and the apprentice. In California we have pursued 
that policy. 

It is for that reason that in practically every area of our State 
we have full cooperation of employers and their organizations, employ- 
ees and their organizations, and the apprentices — all of which, when 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



367 



added up, means that California is, and has a ri<rht to be, proud of its 
accomplishments in the field of apprentice training. 

To extend such a program, predicated upon mutual interests, to 
every trade in every area of the State and to encourage such activity 
is a worthy ambition of any good government. It is definitely a part 
of the present administration of the State of California, and its pur- 
pose Avith respect to apprentice training in the State. 

Today more than one hundred sixty groups, extending from San 
Diego to Eureka, have already adopted apprentice labor standards. 
It is under the provisions of these standards that the twelve thousand 
apprentices are now working. More than six thousand of them have 
been indentured up to now. This year we will graduate another thou- 
sand to be added to the thousand already working as .journeymen, and 
as many more each year thereafter as industry can absorb — as many 
more as will guarantee California's part of the Nation's demand for 
skilled workers — and that part is one of tremendous proportions. 

To meet the ordinary need of our State and Nation, we prepared 
in peace time — now we have a live and growing program fully coop- 
erating and aiding in our National Emergency. 

Today California has more war contracts to fill than any other 
state in the Nation. California can — and must — and will meet its 
every obligation for the salvation of our Nation. 

We must realize that the very life of our democracy — everything 
in life that we hold most dear — is at stake in this total war which has 
engulfed us. 

The American way of life is challenged — we must meet that chal- 
lenge and overwhelmingly defeat those who dare to make that challenge. 

We repeat the words of Abraham Lincoln : "That this Government 
of the people, for the people and by the people shall not perish from 
the earth." 

As Americans we know what we are fighting for — and fight we 
will. We know what we are working for — and work we will to the 
utmost. 

We are at war. The enemy is cunning, cruel, ruthless and, worse 
yet, powerful. We can and will whip that enemy. That is an Ameri- 
can job for all Americans. Several millions of Americans will make up 
our actual armed forces — many more millions must produce the air- 
planes, tanks, guns, ammunition, etc. which our armed forces must 
have when engaged in actual combat. Man to man, our American 
fighting forces are the best ; but they must be equipped with the most 
and best of everything, in all the modern implements of war. The 
latter is the grave responsibility of those of us who remain in private 
and civilian life. 

The principal war arenas are now many miles from our American 
shores. We must keep them there, or else they will come here. In 
my opinion, failure on our part in the industrial and productive fields 
is an open invitation for them to come. 

To me, therefore, it is just plain comomn sense, l6t alone our 
patriotic duty, to get a full complement of the implements of war into 
the hands of our American armed forces and of our allies, and to 
deliver them in full requirement in every particular as to sufficiency 



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STATE PAPERS AND PUBLIC ADDRESSES 



in supply and mastery in make. Our men must cross the oceans — so 
must our supplies — we need ships, and lots of them. 

For California our bigp:est job is the fabrication and outfittinf? of 
ships — air ships and ocean ships. Less in size but equally important 
is the manufacture of the parts that ^ro into those ships. In due pro- 
portion we also have other war production problems. Generally speak- 
ing:, however, our production problem is the same as that in every 
other section of the Nation, that is, to pret the proper number of the 
proper kind of workmen together, with the proper amount of the proper 
kind of material, at the proper time and the proper place, and there- 
after to increase and keep on increasing till we reach the absolute 
ultimate in production. 

In addition to the actual buildinpr and manufacturing of all the 
tools and implements of war we must build the plants where the 
manufacturing? is done;. we must build the cantoninents and barracks 
for our armed forces; we must build the buildinfrs to house our war 
workers ; we must build the docks and wharves and piers to berth our 
ships and load and land our men and supplies; we must build our 
hospitals to care for our injured men. 

We must build and we must have builders. Buildinpr builders is 
a traininjr program. 

"We must gird ourselves to the utmost. Of the things we should 
do — ^first and foremost, we should indoctrinate ourselves, both in mind 
and heart, on what America means to us; we should fill ourselves to 
overflowing with the understanding of the four freedoms comprising 
our American way of life and our objective in our war for victory and 
to win the peace: (1) freedom of speech; (2) freedom of religion; 
(3) freedom from want; (4) freedom from fear. 

By our deeds we shall preserve these freedoms for ourselves and 
our posterity. Thus we shall fit our work to the facts that the produc- 
tion of manpower to meet the Nation's need spells the preservation of 
that Nation ; that our efforts in this work shall transcend our every 
personal thought and desire; that our right of life, liberty, and the 
pursuit of happiness in the future depends entirely upon our efforts 
now; that while some men are making the supreme sacrifice of life 
itself, the rest of us should not and must not fail them in their needs 
for transportation and equipment; that no one individual, no one 
group, and no one section of the Nation can alone save itself; that we 
must save it all for all of us ; that each one must do his full share of 
work and sacrifice; that all of us must learn how to live with one 
another, rather than try to profit at the other fellow's expense; that 
we are in this war as a whole Nation, and we must win it as such ; that 
our Nation and its needs must be our first consideration; that manage- 
ment and labor can and should preserve all of their rights and privi- 
leges when cooperating in conciirrence with these thoughts. 

I have just tried to outline some of the things that we must do in 
order to turn our present national emergency into a permanent national 
victory. 

Our Nation is crying its need for skilled workers — and lots of them. 
"We need ships now. We need airplanes now. We need tanks now. 
We need everything now. Time is of the essence. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



369 



Apprenticeship is basic, is essential, is necessary, is mandatory to 
produce a fully skilled worker. But we must do more than that, and 
we must do it now. We must produce more and then still more, and 
the time element is still now. Our Nation has done something' about 
that, and more is being done. 

As a part of our national activities we have Traininpr Within 
Industry. The underlying? purpose of this activity is: To assist war 
industries to meet their manpower needs by training within industry 
each worker to make the fullest use of his best skill up to the maximum 
of his individual ability, thereby enabling production to keep pace 
with war demands. 

Broadly speaking the actual production manpower needed in 
industry comes within the following brackets : 

1. Supervisors (Foremen, Quartermen, Leadmen, etc:) 

2. Skilled Journeymen 

3. Converted Tradesmen 

4. Trainees (sometimes called Specialists or Operators) 

5. Apprentices 

6. Helpers and Laborers 

Training Within Industry particularly deals with industry's ovm 
training responsibilities. It is accomplished through up-grading of all 
classes of personnel as their experience and abilities warrant, through 
planned job progression, job rotation, and intensive supplementary 
instruction both on and off the job. These functions are performed 
through (a) development of production specialists (trainees), (b) 
development of all-round skilled mechanics through apprenticeship, 
(c) development of supervisors through careful selection and training. 

In California this work has been carried on in the southern part 
of the State under the leadership of Mr. William K. Hopkins as Dis- 
trict Representative, and in the northern part of the State by Mr. A. R. 
Heron of the same title. 

Then there is training outside of industry. This includes pre- 
employment instruction and related supplementary instruction. This 
part of the program is being proA'ided for by the vocational and trade 
schools and by engineering colleges. There is the closest kind of 
cooperation between these groups and industry itself. 

Time does not permit a full description of these two programs, but 
we are pleased to report that by reason of them California today is 
ahead of its assigned quota of production in our national war effort. 

Keep in mind the fact that California has more war contracts 
than any other State and you will understand that our State, therefore, 
has a correspondingly tremendous problem of manpower production. 
In meeting this stupendous problem we have had the advice and 
cooperation of both management and labor. Without this T.W.I, 
program of quickly adjusting men to new operations and new skills, 
we could not have made the unparalleled strides in war production that 
our Nation has made ; nor could we hope to reach that full complement 
of all-out production which must be attained in order to defeat the 
Axis Power. 

To me, as Governor, it is particularly pleasing to know that at the 
inception of this specialized training program the California Appren- 



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STATE PAPERS AND PUBLIC ADDRESSES 



ticeship Connoil volnnteered all of its personnel and services to help. 
Tt is equally pleasincr to know that the services have been accepted by 
the directors of Traininir Within Industry and, in turn, that the 
directors speak in hifrhly complimentary terms of the cooperation 
rendered by our Apprenticeship Council and its staff in administeringr 
its affairs. 

California has another hujre manpoAver problem in Aprriculture. 
AVe are not unmindful of the over-all importance of the production of 
food. That problem we are now endcavorinp' to solve, in cooperation 
with our National Government, ajrricultural experts, representative 
farmer and farm labor jyroups. 

But toniprht we are dedicating ourselves to the cause of producing: 
skilled workers for industry. "We are addressincr ourselves primarily 
to our praduatinp: apprentices who from now on take their places in 
industry as journeymen. 

These younpr men will be our builders of tomorrow. They and 
the other thousands throu<jhout the Nation, who like them have come 
into full competency in their several trades, are the ones who will 
put the full force of our unexcelled youuf? American manhood into 
the buildinsr of the shipyards, factories, foundries, machine shops, can- 
tonments, wharves, docks, piers, and so on to the end of our national 
need. So, too, will these youngr men and the others like them, put 
the full vipror and vitality of trained youth into the construction of 
ships, airplanes, tanks and trucks and the manufacture of all the 
arms, amunitions and complements of war. 

California is extremely and justifiably proud of its apprentices — 
these younjr men who have labored and studied on the job and in the 
school that they mifrht be amply qualified to accept their full share 
of the burden of maintainincr and sustaininp: our American way of life. 

Spcakinpr directly to you younpr men T say that, with the founda- 
tion of an apprenticeship faithfully and successfully served upon 
which to build, your acquired knowledge and skill will bring to you 
the high honor of future leadership and supervision in your chosen 
trades. 

As your Governor it is my profound plea.sure to bring to you — 
and through you to all apprentices everywhere — those genuine com- 
pliments and sincere congratulations which are my own as well as those 
of every agency of Government which has joined in helping you; those 
of your employers and their organizations, your fellow journeymen and 
their organizations ; and those of all the people of the great State of 
California. 

You young men have a right to be happy and proud tonight. 
You have done something really worth while. 

Tonight you receive your certificates testifying to the whole world 
that you have really learned your trade. 

These certificates are yours — to cherLsh, to hold, to keep. 

May I remind you. however, that it is not the record we keep that 
will defeat the dictators — it's the record we make hereafter on our 
jobs that will whip the Axis powers. 

Bear in mind that the highway to Success leads from the City of 
Hard "Work. 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



371 



Do your work! Do it well, and you will have amply repaid all 
of us for our interest in your advancement. 

By the same token we ask that you do for the apprentices who 
follow at least as much as all of us have tried to do for you. 

In return I want to give assurance to those oncoming apprentices 
that, with the cooperation of the various Boards of Education, other 
interested agencies of Government, the employer and employee organ- 
izations, the State of California will continue to extend this program 
of apprenticeship training generally throughout California and build 
it to the point where it will be one of the truly great accomplishments 
of this State. 

Note. — In San DieRo on July 10. 1 942, in the auditorium of tlie Roosevelt Junior 
High School, Governor Ol.'^on again addre-ssed the public and the apprentices in that 
area. His speech in San Diego was essentially the same as that in Los Angeles, with 
the exception that in San Diego the Go\ernor not only presented certificates of com- 
pletion to fl7 graduating apprentices in seven different trades, but also presented appren- 
tice agreements (indentures) to 95 young men who were starting their apprenticeship 
in the several trades at the Consolidated Aircraft Corporation of S.an Diego, 



372 



STATE PAPERS AND PUBLIC ADDRESSES 



THE AMERICAN LEGION 

Address before Annual Convention, Los Angeles, 
August 17, 1942 



Commander Garner, Members of the American Legion 
Fellow Americana 

This is the fourth time that I have been given an opportunity to 
address your Department Convention. 

On each of these occasions. I have felt that my appearance before 
you is not merely a perfunctory official act required of me because of 
my position; it has hoen my belief that I should meet and counsel with 
you reprarding: my duties as Chief Executive of the State. And I 
consider it particularly important in this perilous period in the life of 
our Nation that I have the advice and aid of the Veterans of World 
"War No. 1. I have leaned heavily on that advice and aid in the adop- 
tion of State policies during the trying days of preparation before 
Pearl Harbor, as well as during these more trying days of actual war. 
I shall continue to rely on your advice and aid in the still more trying 
— yes, the dark, tragic days ahead of us, during which unmeasured 
sacrifices of the life blood of our Nation and its people must be made 
in carrying on — in leading the war of the United Nations to victory. 

No other group of citizens possesses such a clear, realistic knowl- 
edge of the needs of the Nation in its slow, painful efforts to be pre- 
pared to successfully carry on this war, and no other group of citizens 
knows as well as you do the price we must pay for victory. 

"When the clouds of war first distinctly appeared on our horizon 
in 1940, there were many good citizens who did not see those war 
clouds ; unfortunately there were other good citizens who did see 
them dimly, but quite naturally turned to the hope that war could 
be avoided if we would only shut our eyes and close our minds to its 
fearful aspect. And then there were in our midst, and there may 
still be some in our midst, those who are not good citizens, but vicious 
enemies of our Nation and our way of life, and who deliberately plan 
our destruction from within by trying to keep us in a state of unpre- 
paredness and by creating distrust and disunity among our people. 

But from its very inception, yow Veterans realized the menace 
that the Axis combination of outlaws meant to our safety and to our 
very existence, and you did everything in your power to awaken the 
State and the Nation to that bitter realization. 

That I shared with you this realization, and anticipated what 
has happened, is proved by the fact that I did everything within my 
power as Governor to have our State prepared for this emergency. 

Since your policies on all matters pertaining to defense of the 
State and Nation have been my policies, I believe it proper and fitting 
that we here recapitulate what has been done in order that we may 
better determine what needs to be done in our State. 

In July of 1940 I appointed the first State Council of Defense in 
the United States, and sent representatives of that Council to "Washing- 



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373 



ton to assist in setting up the Federal office of Civilian Defense and 
the plans and pattern for the organization of State and local defense 
councils. 

You may recall that in my address to you at your annual con- 
vention held at San Diego August 13, 1940, I stated "A few weeks ago 
I appointed a State Council of Defense — to that Council I have 
appointed your State Commander, Mr. Dunn, as well as many other 
war veterans. The Council is now awaiting the further promulgation 
of defense plans by the War and Navy Department, and their instruc- 
tions that are to be followed in our home defense plans. 

"Conferences have recently been held in Washington to outline 
plans whereunder the several states can cooperate most effectively and 
make their greatest possible contributions to our national defense 
efforts." 

In further agreement with you, I advocated the immediate enact- 
ment of the Selective Service Act. Our preparations for carrying out 
its provisions were already made, and in that same address to your 
Convention August 13, 1940, I said: "If, as I hope, a selective service 
bill shall become law, California has already completed its plan to carry 
out its prospective provisions." 

At that same Convention, I also stated that : " I hope that, in fram- 
ing our national defense policy, Congress will embrace the principle of 
' total defense ' ; the principle of making our country invulnerable ; 
proof against invasion by any combination of attacking forces; proof 
against the disintegrating preachments of antidemocracy. 

"I believe that our national policy should consist of at least the 
following named four elements : 

1 — The drafting of man power 

2 — The drafting of capital 

3 — An effective Pan-American policy, and 

4 — A program of internal economic and moral rehabilitation." 
That was said to you in 1940. You all know of the functioning of 

our State Council of Defense since then and the organization of our 
local councils of Defense because you have taken and are still taking 
a leading part in both. Incidentally, since Past Commander Dunn's 
appointment to the State Council of Defense in 1940, it has been my 
policy to place the incumbent Commanders of the American Legion 
and Veterans of Foreign Wars on that Council. Past Commander 
William Farrell held the position in 1941, and at the present time your 
Commander Robert Garner represents the American Legion as a mem- 
ber of the Council. In addition to the Department Commanders, many 
other veterans are serving on the various committees of the State 
Council of Defense. 

A year before Pearl Harbor, as it appeared that the California 
National Guard would be called into the regular Army, the necessity of 
creating a State Guard to take its place seemed obvious to me and at 
that time I said in a public address : 

"From the standpoint of strategy of war in the Pacific, California 
is of chief importance — our hydroelectric power system, our aircraft 
plants, and our forests would be major objectives of attack. The 
question is what can we do and how can we do it? First, on the 



374 



STATE PAPERS AND PUBLIC ADDRESSES 



military front we can organize local Guard units for emergency 
defense. ' ' 

1 instructed The Adjutant General to commence planning the 
organization of adequate State Guard so that when, as occurred in the 
early part of March, 1941, the National Guard of California was 
inducted into the Federal service, the State should not be left without 
an adequate military force to guard against sabotage and i)revent riots, 
insurrection or other civilian disturbances beyond the control of local 
police forces. Patriotic citizens volunteered as enlistees in the State 
guard units, many of them, a majority, were veterans of the World War. 

Companies and regiments were organized by competent and expe- 
rienced military direction, and in accordance with established military 
tables. These citizens trained and served without compensation and 
furnished their ow^n uniforms, equipment and transportation. 

You supported me in this preparation. At your convention at 
Sacramento last year, you went on record emphatically declaring that 
the State should maintain an adequate State Guard, and the following 
provision was added to the Military and Veterans Code: 

"The Governor is directed to organize and maintain a State Guard 
with a minimum numeri(;al strength of ten thousand persons and not 
to exceed sueh maxinuim numerical strength as the Governor may pre- 
scribe." 

As stated, this work was well under way and it w'as not long until 
approximately sixteen thousand five hundred men and officers were 
enrolled in the State Guard. These patriotic citizens continued to train 
and serve without pay and to furnish their own uniforms and equip- 
ment. 

Immediately after the attack on Pearl Harbor, I called for addi- 
tional volunteers and more than ten thousand men, mostly ex-service 
men, hastened to enlist. Within tw'O liours after the attack, State Guard 
troops were on active duty guarding all bi'idges, tunnels, dams, public 
utilities and defense in.stallations not then guarded by Federal troops. 

Not a man failed to resi)ond to his orders despite the fact there 
were no funds available with which to compensate the guardsmen for 
their services. 

Regular Army officers inspected the Guard; approved and com- 
mended it. This approval was indicated further by the War Depart- 
ment furnishing the Guard with nineteen thousand new ritles, ample 
ball ammunition and large stores of other necessary equipment. 

With this situation before us, I convened the Legislature in special 
session on December 19, 1941, to obtain an appropriation for the sup- 
port of the Guard. The protracted special session of the Legislature 
resulted in the passage of an act, compelling the reorganization of the 
Guard as a condition of an appropriation made for its maintenance. 
Despite all difficulties of this nature, the Guard has, with a patriotic 
morale, been maintained, performing its duty in the protection of life 
and property in California. 

I have endeavored, throughout, to obtain the most c()ni])etent and 
experienced military officers available in the organization and command 
of the Guard and to maintain it as strictly a military organization as is 
the Federal Army with which the work of the Guard is so closely 
related. 



PUBLIC ADDRESSES AND RADIO TALKS— 1942 



375 



On June 8th of this year, at my request, the President of the United 
States assigned Major General Walter C. Sweeney of the Army of the 
United States to the State of California, and he was placed by me in 
full command of the military forces of California and given full 
responsibility with commensurate authority for the efficient organiza- 
tion and command of our State Guard and State Militia. He is answer- 
able, not only to me, but also to the War Department, and our State 
Military forces are performing according to Federal and State coordi- 
nated plans. 

If time permitted, I should like to review more in detail the work 
and accomplishments of our State and local 'defense councils, and the 
departments of the State government in the war effort. All of us 
realize that California, with its long coastline in the combat zone, its 
great forests, fields, war industries, oil fields, refineries, great irrigation 
dams, hydroelectric plants and strategic military installations, has a 
position in this war vastly different and more vital in carrying on the 
war than most states. With this realization and a deep sense of our 
responsibility, we shall continue to drive for the achievement of the 
maximum in our efforts to marshal all of the resources and manpower 
of our great State in the successful prosecution of the war ; in all of the 
work that must be done on the home front ; and in the protection of 
the life and property of our citizens. 

The work of our State Council of Defense and the State govern- 
mental agencies is carried on, as are my own activities in the civilian 
defense and war effort, in close cooperation with the Army and Navy 
officials in command of the Western Area, and with the Federal Office 
of Civilian Defense for this area. All important measures pertaining 
to defense matters, as well as our State military operations are under- 
taken in close liaison with Federal authorities. I particularly wish to 
mention the splendid and successful coordination and cooperation in 
the activities of the Civilian Government of California, and the Western 
Army Command under General J. L. DeWitt. 

Many of the activities I have in mind will undoubtedly be covered 
by reports from your own committees, because there is hardly an act-' 
ivity connected with the war and defense of California in which the 
American Legion has not taken a vital part. 

I wish to turn for a few moments to another phase of war that must 
not be lost sight of in the smoke of nearby battles. I refer specifically 
to the disabled, the sick and indigent veterans of the other war. Our 
surest guarantee of the treatment all young soldiers of this war may 
expect is the way we care for the veterans of the last war and prove by 
our acts that we remain grateful for the sacrifices those soldiers made 
for us when called upon to defend our Nation. 

California is one of the very few states that maintain its own hos- 
pital and home for veterans. I am frequently surprised to learn that 
many veterans do not know of this splendid State institution and what 
it can mean to the California veteran. Situated at Yountville, Napa 
County, it is surrounded by nine hundred and eighty beautiful acres 
of land. Last year I requested the Commandant of the Home, Colonel 
Nelson M. Holderman, to submit a ten-year plan for steady improve- 
ment and enlargement of the liome and its facilities. In addition to the 
increased membership made inevitable by the advancing age of our 



376 



STATE PAPERS AND PUBLIC ADDRESSES 



present veterans, we must make plans for the veterans of the present 
war. Colonel Holderman and the Board of Directors of the Home have 
submitted a plan based upon an estimated membership of five thousand 
veterans. The present facilities accommodate approximately fifteen 
hundred veterans. 

I shall present this plan in more detail to your new Commander, 
and I am confident that the American Legion and other Veterans' 
organizations will be pleased to give it their united suj)port. 

During the past three years we have succeeded in securing appro- 
priations for some long-needed improvements at the Home, outstanding 
of which are : The new mess hall, an improvement costing $400,000 ; a 
modern Sewage and Treatment Plant, costing $135,000 ; and the Rector 
Canyon Dam, a million dollar project, which will solve the acute prob- 
lem of water shortage at the Home. "With the aid of the American 
Legion Legislative Council, priority rights for materials for the con- 
struction of this dam will be secured from the War Production Board. 

The State Veterans Welfare Board, by the use of State credit, has 
helped, and is helping many California enlisted veterans to acquire 
homes or farms. This is a successful and highly beneficent use of State 
power and credit. Provisions should be made for the extension of its 
benefits to the veterans of the present war and to all veterans who are 
now bona fide citizens of California, regardless of where they may have 
been enlisted. 

In connection with the thought that we must not overlook the needs 
of the veterans of previous wars, a situation has been brought to my 
attention which may require some action by the State. I am advised 
that the American Legion, through the service departments of County 
Councils, particularly in the metropolitan areas, has carried on a charity 
program for the benefit of disabled world war veterans and more 
recently disabled veterans of the present war, eligible for Federal aid 
but not receiving it, or who receive inadequate Federal aid. 

No wortiiy, disabled veteran should be faced with the necessity of 
seeking private or public charity. Such aid, in the temporary care of 
hardship cases of California's disabled veterans, should be provided for 
by appropriate legislation, which I hope will be enacted when the 
regular session of our Legislature convenes next January. 

In concluding my remarks, I wish to leave but one more thought 
with you for your most earnest consideration. You are, for the most 
part, in the age group which has reached the maximum of its mental 
and physical vigor. It is therefore your generation which now has the 
responsibilitj' of leadership not only in war activities, on the home 
front, but in shaping the new world order when victory shall again have 
been won for the democracies of the United Nations. 

It was you as younger men who won the war, and it was those on 
the home front who lost the peace. 

This time we must win the war and the peace. It is up to us to 
see to it that our young soldiers and sailors, upon their return to the 
pursuits of peace after their victorious fight to again save freedom and 
democracy, are not dissillusioned by the fallacious cry of "back to 
normalcy"; by a cynical disregard of corruption and of good morale 
in private and public life; by a wild scramble for private gain at the 
cost of social gains; by a refusal to act in concert with our allies in 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



377 



preserving and enforcing, with the necessary fleets and armies, observ- 
ance of the peace for which we now fight at such a fearful cost in blood 
and treasure. 

I urge that your leadership be directed not only to winning the war 
on the home front, but to winning the kind of a peace that can be 
enforced and made enduring when victory shall again be ours. To win 
that kind of a peace there must be a new world order in which the 
standards of civilization shall be raised to higher levels than have ever 
before been reached ; a world order which recognizes human rights as 
more sacred than the right to exploit the toil of human beings; a world 
order in which the hunger, poverty and material needs of people any- 
where on earth shall be the concern of the rest of the world. 

The peace objectives of the United Nations, the freedom for which 
we are fighting, including freedom from want and fear, can not be 
achieved and made secure without international economic justice. It is 
our problem to intervene and aid in the establishment of principles, 
policies, ways and means of accomplishing those objectives and in the 
establishment by the United Nations of international institutions, both 
civil and military, to instrument, enforce and preserve the peace of the 
world. 



25—18527 



378 



STATE PAPERS AND PUBLIC ADDRESSES 



LABOR DAY— 1942 

Address broadcast over Station KFWB, Los Angeles, September 7, 1942 

On the first Monday in September, 1882, just GO years ago today, 
the Knights of Labor, the forerunner of the American Federation of 
Labor, paraded in the streets of New York City celebrating their 
accomplishments and testing their strength. Since then Labor Day has 
become a legal holiday in most states and territories of our Union. It is 
a legal holiday in California. 

But in these times of grave national emergency, the workers in the 
war plants of our country are at work on Labor Day. The workers in 
our war industries are too conscious of what this war means to them to 
stop working on this Labor Day. They know too well that they must 
keep forging the implements of destruction in order to be able to pro- 
duce implements of construction and goods for consumption after the 
war is won. 

That the workers of our country have made tremendous strides in 
the improvement of their economic status under our democratic insti- 
tutions is obvious to all who are aware of the accomplishments of organ- 
ized labor. It should not be forgotten that these improvements have 
been accelerated by Federal and State laws, which, especially in the 
last decade, have recognized that Labor as a group in our population 
has the same right as have other groups to pursue life, liberty, and 
happiness. Thus, the National Labor Kelations Act, which grants the 
right of workers to organize and bargain collectively, can not be 
abridged by unfair practices of antilabor employers. With the aid of 
this basic labor law, hundreds of thousands of working men and women 
have been brought into membership of organized labor. Therefore, 
w^orkers in defense industries sparsely organized or wholly unorganized 
prior to the enactment of the National Labor Relations Act, are now 
benefiting by the collective bargaining provisions of union contracts. 

The Fair Labor Standards Act, another important labor law, 
recently enacted, now insures a minimum wage and a maximum work 
week for those who, lacking organization, were frequently deprived of 
the necessities of life by employers who were relying upon low wages 
and long hours to gain unfair advantage over their competitors. 

The Social Security Act and the State Unemployment Insurance 
Laws are another milestone in the long struggle of Labor for greater 
security against the contingency of involuntary unemployment which 
has plagued the lives of the working men and women of our country in 
times of recurrent periods of widespread depre.ssion as well as in 
periods of lesser but more frequent business recessions. 

The achievements of Ijabor are j^our achievements; they are my 
achievements; they are the achievements of all of our people. This is 
so because organized labor has always been the vanguard of all pro- 
gressive thought and of all progressive movements for the amelioration 
of the conditions of the have-nots, of the common people who depend 
upon work and wages for their existence. Our labor movement has 
never accepted the pernicious doctrine of those who believe that our 



PUBLIC ADDRESSES AND RADIO TALKS— 1 942 



379 



national income can oiil}' afford a fixed amount of money that can be 
used for the payment of wages and that our national prosperity would 
suffer if the workers of our country would strive for an ever-rising 
standard of living. This doctrine has been spurned by our labor move- 
ment as well as by all forward-looking citizens of our country who 
recognize no limits in the economic advancement which can be attained 
by the creative genius of our people. 

Labor's interest in this war is basic. The workers of our country 
are grimly aware of the fate which awaits those who come under the 
brutal rule of the Nazi brown shirts, the Fascist black shirts, and their 
fellow gangsters of Japan. 

Being fully conscious of the stake they have in the winning of this 
war, the workers of our country are devoting their full strength to the 
tasks that lie before them in our war production plants. The workers 
who have not j^et joined the armed forces are today in the ranks of the 
working battalions of our factories, mills and mines, forging the weap- 
ons of warfare and producing the vital materials urgently needed by 
our soldiers and sailors and by the armed forces of our gallant allies. 

The leaders of organized labor have been successfully urging their 
members and all other workers to work steadily and efficiently to insure 
the maximum output of our war production plants. 

Labor's contribution to the winning of the war can be made more 
effective by the greater and more general